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http://www.archive.org/details/cu31924022343887
A DIGEST
LAW OF PARTNERSHIP,
WITH AN APPENDIX OF FORMS.
BY
Sib FREDERICK POLLOCK, Bart.,
BARRISTER- AT-LAW,
M.A., HON. LL.D. EDIN. , DUBLIN, AND HARVARD,
CORPUS PROFESSOR OF JURISPRUDENCE IN THE UNIVERSITY OF OXFORD,
CORRESPONDING MEMBER OF THE INSTITUTE OF FRANCE,
LATE FELLOW OF TRINITY COLLEGE, CAMBRIDGE.
SEVENTH EDITION.
LONDON :
STEVENS AND SONS, LIMITED,
119 & 120, CHANCERY LANE,
fain luMtsljers.
1900.
^77 3d.
BRADBURY, AGNEW, & CO. LD., PRINTERS,
LONDON AND TONBRDDGE.
PKEFACE.
The form of this work is no longer a matter of
private choice as to the greater part of it, and
therefore no longer needs an apologetic introduc-
tion. It will suffice to explain how the book
became, in its fifth edition, an edition of an Act
of Parliament, and could become so while pre-
serving most of its original substance. In 1877,
having been asked to write a concise work on
Partnership, I determined to follow Sir James
Stephen's example in his Digest of the Law of
Evidence (an example which then stood alone),
and to frame the book on the pattern of the
Anglo-Indian Codes. It then seemed to me
possible that Parliament might be induced to
adopt Macaulay's invention of adding authorita-
tive illustrations to the enacting text of a code ;
I call it Macaulay's, for I have not found in
earlier writers, including Bentham, more than
slight rudiments of the idea, and its first distinct
appearance was certainly in the draft of the
Indian Penal Code. But at all events this
method of statement enables the private author
a2
iv PRE FA GE.
of a Digest in codified form to exhibit in the
clearest and shortest way the substance of the
authorities on which his text is founded. When
such a Digest is used as the groundwork of a
Bill, and the Bill finally becomes an Act of
Parliament, as happened with Mr. Chalmers'
Digest of the Law of Bills of Exchange, and
later with the present work, the decisions
exhibited by way of illustration are no longer
the only part of the work having authority, but
they remain authoritative so far as they are con-
sistent with the terms of the Act, and a summary
view of them will often be convenient, sometimes
almost necessary, for the understanding of the
law as now declared by the Legislature. Unless
the law has been purposely altered, which in a
codifying Act is a rare exception, the decisions
are still the material from which the rule of law
has been generalized. The rule has acquired a
fixed and authoritative form, but the principle is
the same. It is a minor question, in a country
where the law is uniform, and its administration
is in the hands of trained lawyers, whether it
be desirable for the Legislature to undertake the
selection and statement of illustrations to a Code.
Perhaps it is a thing best left to private enter-
prise ; the rather, in this country, that the con-
ditions of our legislative procedure make Parlia-
ment about the least fitted of European legislative,
bodies for such a task. Meanwhile experience
PEE FACE. v
has shown the convenience of Macaulay's method
for the statement of a well settled branch of law
by way of private exposition, and has also shown
that it may prepare the way for codification.
Mr. Chalmers' work, which was first published
not long after this, was transformed into a Code
(the Bills of Exchange Act) in 1882, and in 1893
the Sale of Goods Act, also prepared by him,
codified another important branch of commercial
law.
The history of the Partnership Act may be
very briefly told. In 1879 I drafted a Bill
intended, first, to codify the general law of
partnership ; secondly, to authorize and regulate
the formation of private partnerships with limited
liability, corresponding to the societe en commandite
of Continental law ; and, thirdly, to establish
universal and compulsory registration of firms.
The two latter objects were those which my clients
at that time were most bent on. Subsequent
experience has shown that the facility given by
the Companies Act, though seemingly unsus-
pected by its framers, of forming a limited company
with as small a number of substantial members
as may be desired (Salomon v. Salomon <& Co.
[1897] A. C. 22) makes any intermediate grade of
limited liability needless. The registration part
was dropped in 1880 as a condition of the general
approval of the Board of Trade. In 1882 the Bill
vi PREFACE.
made so much way as to be reported by a Select
Committee, which, however, declined to proceed
with the limited partnership scheme. After being
again introduced several times without reaching
the stage of effectual debate, the Bill was, in 1888
and 1889, further considered by the Board of
Trade and the Attorney-General with a view to
its adoption by Ministers. In 1890 it was intro-
duced by the Lord Chancellor in the House of
Lords, and there revised by a Select Committee,
which made various changes in the arrangement
of the sections and a certain number of amend-
ments. The Bill passed through the House of
Commons with a few further amendments, due
partly to Sir B. Webster,* then Attorney-
General, and partly to Sir Horace (now Lord)
Davey, became law, and came into operation on
January 1, 1891.
The Act may not have added much to the
knowledge of the law possessed by practising
members of the Chancery Bar, but even to them
it may save time and trouble. Some familiar
principles for which there was but little reported
authority have been placed beyond even formal
doubt, and some doubtful points are settled
according to modern usage and convenience.
Possibly members of the Common Law Bar, and
probably students entering on the subject, may be
* Now Lord Alverstone.
PREFACE. vii
thankful for the Act ; and it ought at any rate to
make the substance and reasons of the law more
comprehensible to men of business who are not
lawyers. It is not to be supposed that difficult
cases can be abolished, or to any great extent
made less difficult, by this or any other codifying
measure. But since difficult cases are after all
the minority, perhaps it is of some importance
for men of business to be enabled to see for
themselves tbe principles applicable to easy ones.
The Act does not deal with the rules of pro-
cedure governing actions by and against partner-
ship firms, which are already codified in the Rules
of Court, nor with the administration of the assets
of firms and partners in bankruptcy, which is
governed by the Bankruptcy Act and Rules, and
the case-law which that Act assumes to be known.
The parts of the present work relating to these
topics are, for the convenience of presenting the
subject as a whole, retained in their old form.
It will be observed that the Partnership Act
does not purport to abrogate the case-law on the
subject, but on the contrary declares that " the
rules of equity and common law applicable to
partnership shall continue in force except so far
as they are inconsistent with the express pro-
visions of this Act" (sect. 46). The Act, there-
fore, has to be read and applied in the light of
viii PREFACE.
the decisions which have built up the existing
rules. Should any -practitioner imagine that he
might now relegate Lord Lindley's book, for
example, to an upper shelf, he would be soon
undeceived. Codes are not meant to dispense
lawyers from being learned, but for the ease of
the lay people and the greater usefulness of the
law. The right kind of consolidating legislation
is that which makes the law more accessible
without altering its principles or its methods.
So far as judicial references to the Act have
gone, they tend to show that it has accomplished
its object of declaring the law as it was settled
and understood, without prejudging any remain-
ing doubts on questions of principle, and without
raising any new doubts on points of detail.
In the present edition some simple conveyancing
forms have been added, which, it is hoped, may
be found useful. They are contributed by my
learned friend and cousin Mr. Dighton N. Pollock,
of Lincoln's Inn.
F. P.
13, Old Square, Lincoln's Inx,
Michaelmas, ] 900.
TABLE OF CONTENTS.
PART I.
THE PAETNEBSHIP ACT, 1890.
(53 & 54 Vict. c. 39.)
Nature of Partnership.
SECT. page
1. Definition of Partner ship 1
Distinction between partnership and common ownership
or sharing gross returns
Limitation of number of partners in private partnership
2. Rules for determining existence of partnership .
Cox v, Hickman .......
3. Postponement of rights of person lending or selling in con
sideration of share of profits in case of insolvency
4. Meaning of firm
Firm not recognized as artificial person in England
Otherwise in Scotland
Use of names in general
Foreign laws as to firm-names
Trade name and trade mark .
10
12
19
21
21
22
22
24
24
Relations of Partners to Persons dealing with them.
. Power of partner to hind the firm 27
Exception where there is neither apparent nor real
authority 28
General limits of partner's authority . . . .29
Implied authority of partners, and especially of partners
in trade 29
Special instances : negotiable instruments . . .31
TABLE OF CONTENTS.
Borrowing money
Sale and pledge ....
Purchase .....
Employment of solicitor
Eeceipt of payments and releases .
Servants
Where authority not implied : deeds
Guaranties .....
Submission to arbitration
6. Partners hound by acts on behalf of firm
7. Partner using credit of firm for private purposes
Whether reasonable belief in partner's authority makes
a difference .
8. Effect of notice that firm trill not be bound by acts of
partner .........
Restrictive agreement inoperative if not notified .
9. Liability of partners .......
10. Liability of the firm for wrongs .....
11. Misapplication of money or property received for or in
custody of the firm .......
12. Liability for wrongs joint ana 'several . . . .
When principle of agency applies .....
Misapplication of client's money by one partner .
13. Improper employment of trust property for partnership
purposes .........
Cannot be said to create partnership liability
14. Persons liable by " holding out" ...
What amounts to " holding out "...
The rule applies to administration in bankruptcy
But not to bind deceased partner's estate
Liability of retired partners ...
15. Admissions and representations of partners
16. Notice to acting partners to be notice to the firm
17. Liabilities of incoming and outgoing partners .
Test of liability of new firm
Novation
18. Revocation of continuing guaranty by change in firm
Evidence of intention that guaranty shall continue
'AGE
33
33
33
34
34
34
34
35
35
35
35
38
39
39
41
44
44
44
41)
50
52
52
53
55
55
56
56
57
58
58
61
62
62
63
TABLE OF CONTENTS.
Eelatioxs of Partners to one another.
SECT.
19.
20.
21.
-»
PAGE
63
Variation bg consent of terms of partnership
Partnership property 65
Property bought with partnership money . . . .68
Conversion into personal estate of land held as partnership
property 69
What is a partner's share 71
23. Procedure against partnership property for a partner's
separate judgment debt . . . . . .71
Eules of Court for the purposes of this section . . 73
24. Mules as to interests and duties of partners subject to special
agreement. . 75
As to presumed equality of shares ....
As to rights of partners to indemnity and contribution .
As to the right of the partners to take part in the business
Duty of gratuitous diligence in partnership business
Consent of all required for admission of new partner
Power of majority to decide differences
Eight to copy books ....
25. Power to expel partner ....
26. Retirement from partnership at ivill
27. Where partnership for term is continued over, continuance
on old terms presumed
28. Duty of partners to render accounts, &c. .
29. Accountability of partners for private profits
Parallel rule in agency ....
3(1. Duty of partner not to compete with the firm
31. Rights of assignee of share in partnership
Dissolution of Partnership and its Consequences.
32. Dissolution by expiration or notice .
33. Dissolution by bankruptcy, death, or change .
34. Dissolution by illegality of partnership .
35. Dissolution by the Court ....
Dissolution at suit of partner of unsound mind
Conduct of partner as ground for dissolution
36. Rights of persons dealing with firm against apparent
members of firm
77
77
78
79
79
81
82
82
83
84
87
88
89
89
91
92
93
93
94
96
97
98
xii TABLE OF CONTENTS.
SECT.
37 . Right of partners to notify dissolution
38. Continuing authority of partners for purposes of wind-
ing up
39. Rights of partners as to application of partnership pro-
perty
Nature of partner's right as lien ....
Against whom available .....
Confined to partnership property at date of dissolution
Kules as to disposal of goodwill ....
Eights of purchaser thereof
Nature and incidents of goodwill ....
Goodwill does not survive
Eestraining subsequent use of partnership name .
40. Appwtionment of premium ivhere partnership prematurely
dissolved ........
Rule in Atwood v. Maude
41. Rights where partnership dissolved for fraud or misrepre
sentation ........
42. Right of outgoing partner in certain cases to sJiare profits
made after dissolution .....
Claims against continuing partners qua executors or
trustees
Such claims must be distinct ....
Double or mixed claims for profits and interest not
allowed
Account of profits after dissolution useless in practice
What interest given
43. Retiring or deceased partner's share to be a debt
Surviving partner, as such, is not trustee
Statute of Limitations applies ....
44. Rule for distribution of assets on final settlement of
accounts ........
45. Definitions of " Court " and " business " .
4(>. Saving fur rules of equity and common lair
47. Provision as to bankruptcy in Scotland .
48. Repeal
49. ('omuicnceincnt of Act
50. Short title
PAGE
100
101
105
107
108
109
110
110
113
114
115
116
119
120
121
125
128
129
129
129
130
130
130
130
132
133
133
133
133
133
TABLE OF CONTENTS.
PART II.
PEOCEDUKE AND ADMINISTBATION.
CHAPTER I.
Procedure in Actions by and against Partners.
RULE
1
2
3
4
[Order XL Villa.] Actions in name of firm .
Discovery of partners' names in actions by firm
Service of writ in action against firm
Notice in ivhat capacity served
y. Appearance of partners
6. No appearance except by partners .
' . Appearance under protest of person served as partner
8. Execution of judgment against firm
9. Attachment of debts owing from, a firm .
10. Application of Rules to actions betiveen co-partners
11. Application of Rules to person trading as a firm
PAGE
. 135
. 136
. 137
137
138
138
138
139
140
140
141
CHAPTER II.
Procedure in Bankruptcy against Partners.
iET.
1. Consolidation of proceedings under joint and separate
petitions . . . 143
2. Creditor of firm may petition against one partner . .143
3. Court may dismiss petition as to some respondents only . 143
4. One trustee for property of partners separately bankrupt . 144
5. Creditor of firm may prove in separate bankruptcy for
purpose of voting 144
6. Dividends of joint and separate properties generally
declared together 145
7. Actions in names of trustee and solvent partners . . 145
civ TABLE OF CONTENTS.
CHAPTER III.
Administration of Partnership Estates.
i.RT. PAGE
1. General rule of administration : joint and separate estate . 147
Dicta stating the rule . . . . . . .150
Provisions of Bankruptcy Act, 188 a . . . .150
Pule of Indian Contract Act . . . . .151
Discrepance between the legal and the mercantile system
of administration . .... 152
Law of Scotland . .153
Law of France, Switzerland, and Germany . . . 153
2. Gases ivhere joint creditors may prove against separate
estate .154
3. Where joint estate may prove against separate estates or
estate of minor firm . . . . . . .155
4. Partners must not compete with creditors (subject to special
exceptions) . . . . . . .158
Loan to firm by wife of partner ..... 159
The exceptional right of proof in cases of fraudulent con-
version considered : judgment in Lacey v. Hill . . 1(13
Creditor's right against estate of deceased partner. . 1(18
5. Rights of joint creditors holding separate security, or con-
versely . . . . . . . . . lllll
fi. Doubh proof allowed on distinct contracts with firm and
with its members severally ......
7. Effect of separate discharge of partner ....
171
173
PART I I I
FORMS.
1. Deed of partners!) ip between two business men . . .174
2. Deed of partnership between three business men . . lsn
3. Drea 1 of partnership between three solicitors . . . 1S7
4. Deed of dissolution of partnership . . . . .1114
INDEX
199
TABLE OF CASES.
Aas v. Benham
Abbott, Re
Adams v. Bankart
Adamson, Ex parte
Agace, Ex parte
Airey v. Borham
Akhurst v. Jackson
Alder v. Fouracre
Alderson v. Pope
Alien v. L. & S. W. E.
Anonymous (2 K. &
441)
Arundell v. Bell
Asbwortb v. Munn
v, Outranx
Astle v. "Wright
Atkins, Ex parte
Att.-Gen. v. Hubbuck
Atwood r. Maude 97,
Austen v. Boys
B.
PAGE
90, 91
144
35
154
58
9, 118
117
89
40
50
95, 97
115
70
93
118
163
70
117, 119
. 115
63
Backhouse c. Hall .
Badeley v. Consolidated
Bank . . .17, 21, 43
Baird's Case ... 28
Bank of Australasia v.
Breillat 30, 31, 33, 36, 37
of England Case . 68
Banks v, Gibson . .115
Barber, Ex jiarte . . 65
Barfield v. Loughborough 103
Baring's Case ... 47
Barnes v. Youngs . . 83
Bate, Ex parte . . .170
Baxter e. West . . 97
Bayley r. Manchester,
Kaiiway Co.
Beckett v. Eamsdale
Belfield <•. Bourne .
Bentley v. Craven .
Bignold v. "Waterhouse
Bilborough v. Holmes
Bing, Ex parte
Binney i\ Mutrie
Bishop v. Countess of Jersey
. 49
43, 168
. 120
. 89
. 39'
. 60
. 20
. 132
46
Blair v. Bromley . 44, 45
Blisset v. Daniel . 81, S3
Bluck v. Capstick . .119
Blyth v. Fladgate 43, 48, 51, 52
Bolingbroke v. Swindon
"ILocal Board .
Bonbonus, Ex parte .
Bond v. Gibson
Brettel v. Williams .
Brice's Case
Brown ,. DeTastetSO, 122
r. Hutchinson
!>. Leonard
Buckley r. Barber
Bucknall v. Eoiston
Budgett, lie
Bullen v. Sharp
Bullock v. Caird
v. Crockett
Burchell v. Wilde 112,113
Burdon v. Barkus
Burgess v. Burgess
Burmester v. Norris
Bury v, Allen .
Butchart v. Dresser
Butcher, Ex parte
50
33
34
35
100'
123,
129
72, 73
41
104
109
155
13
154
118
115.
116
67, 75, 78
. 23
. 33
. 118
102, 105
. 149
TABLE OF CASES.
0.
PAGE
Oambefort & Co. v. Chap-
man .... 43
Campbell -•. Mullett . 70
•Carr i>. L. & N. W. E. Co. 54
Carter v. Whalley . 56, 99
Castell, Ex parte . . 156
Chandler, Ex parte . . 43
Cheesman v. Price . . 97
•Childs, Be ... 93
Chippendale, Ex parte
(German Mining Com-
pany's Case) . 75, 78
Churton v. Douglas 110, 112,
113, 114
Clark v. Leach ... 86
Clayton's Case . 45, 60, 100
Cleather v. Twisden .
Clegg f. Edmondson .
Clements v. Hall
r. Norris .
Collinge, Ex parte .
Const r. Harris 63, 64,
Cook, Ex, parte
,,. Collins-ridge
Cookson r. Cookson .
■Coomer r. Bromley .
Cooper n. Adams
r. Prichard .
Cope v. Evans
Corbett, Ex parte
Couldery v. Bartrum
Court v. Berlin .
Coventry r. Barclay
Cox r. Hickman 4,
46, 48
88
89
81
161
65, 81
162
112
85
48
155
46
26
. 169
59, 99
64
12, 13. 17,
IS, 40, 41
— r. Willoughby . . 8. 3
Craven v. Edmondson . 103
Crawshay r. Collins . . 123
r. Maule . 5, 67, 92
■Croft ,-. Pike . . . 106
d.
Darhv r. Darby . ('^. 107
Darlington, Ac. Banking
Co., ' A't parte 27,31, 36, 37
David and Matthews, He 111,
113, 114, 115
1 >a\ies /'. Lowndes . . 22
Davis -'. Davis. 12, 17, 19, 67
Davison, lie ... 43
Daw .'. Herring . 85, 87
Dawson r. Beeson . .111
Dean v. MacDowell . . 91
Dear, Ex parte . . 149, 150
De Bemales v. New Tork
Herald . . . .141
Delhasse, Ex parte . . 16
Deny i: Peek . . .121
Devaynes /•. Xoble 45, 47, 60,
100
Dickin, Ex parte . 145, 171
Dickinson r. Valpy . . 32
Doetsch, Ri- . .154
Du Boulay r. Du Boulay 24, 25
Dundonalii (Earl of) v.
Masterman . . .49
Dutton r, Morrison . .152
Ebbs r. Boulnois . . 144
Edmonds, Ex parte . . 161
r. Robinson . 120
Ellis . . Wadeson . .138
England r. Curling . . 6, 64
Eno ■ . Dunn ... 26
Esposito r. Bowden . . 94
Essel . . Hayward . . 95
Essex i; Essex . . So
Eyre. Ex parte . 47
F,
Farquhar >: Hadden . 71
Farr r. l'eart-e . . .115
Fawcett r. Whitehouse . S(i
Featherstonhaugh >'. Fen-
wick . . 85, SS
Flockton r. Banning . 127
Fox c Clifton . 42, 55
--r. Ilanbury . 102, 106
Frances Handford & Co.,
Be ... 141
Eraser r, Kershaw . . 102
Freelandr. Stansfeld 117, lis
Fri'iich ,-. Styling . . 2
Friend r. Young . 41, 100
G.
Gall way (Lord) r. Mathew 40
Garland r. Jacomb . 39
TABLE OF CASES.
German Mining Com-
pany's Case .
Gillett v. Thornton .
Gillingham < . Beddow
Ginesi v. Cooper & Co.
Glassington v. Thwaites
Gliddon, Exparte
Gordon, Ex parte
Gosling v. Gaskell .
Grain's Case
Gray v. Chiswell
Grayson, Be
Grazebrook, Exparte
Greatrex v. Greatrex
Green i: Beesley
Griswold !'. Waddington
H.
Hall v. Barrows
Hamil v. Stokes
Hammond, Ex parte
Handford & Co., Be.
Harman v. Johnson .
Harris, Exparte 156,
Harrison v. Jackson .
e. Tennant
Hayman, Exparte .
Head, Re .
Heath v. Sansom
Heilbut v. Nevill
Helmore v. Smith
Hendriks v. Montagu
Hendry v. Turner
Hildesheim, Be
Hinds, Ex parte 66,
Hodgson, Be .
Holloway v. Holloway
Holme v. Hammond
Honey, Exparte
Hort's Case
Houlton's Case
Hunter v. Dowling .
id
85
114
108
90
163
160
13
62
152
20
162
76
2
94
112
117
173
141
45
157,
164,
165
34
9(
, 97
56,
159
61
56,
103
37
73
26, 27
101
20
158,
166
43,
168
23
14, i'
172
62
100
10
6,
130
Ide, Ex parte
J.
J. v. S. .
Jennings v. Baddeley
v. Hammond
142
95
96
9
PAGU
Jennings v. Jennings . 112
Jones, Ex parte. Be Young 11
r. Foxall . 127, 129
i: Lloyd . . 92, 93, 96
v. Noy ... 95
K.
Kelly !\ Hutton
Kemptner, Ex parte .
Kendal v. Wood
Kendall /•. Hamilton
Kewney v. Attrill
Kilshaw v. Jukes
King v. Chuck .
Knox i'. Gye .
. 80
. 70
37, 38
42, 43
. 73
14
. S6
89, 130
L.
Labouchere r. Dawson 111,
Lacey v. Hill 58, 151, 156,
161, 164, 166,
Lacy v. "Woolcott
Langmead's Trusts, Be 107,
Lawson v. Bank of London
Leaf v. Coles .
Leary v. Shout
Lee i>. Haley .
v. Page
Levieson v. Lane
Levy t>. Walker 23, 110,
Lewis r. Beilly 39, 103,
Limpus v. General Omni-
bus Co.
Llewellyn ■!;. Butherford .
Lodge and Fendal, Ex
parte . 157,
v. Prichard . 148,
London Financial Asso-
ciation v. Kelk
Lovell v. Beauchamp
Lyon v. Haynes
v. Knowles
v. Tweddell . 98,
Lysaght v. Clark
M.
Maclver v. Burns . .141
M'Kenna, Ex parte (Bank
of England Case) . . 68
b
113
158,
167
103
108
26
95
97
25
119
37
111,
116
104,
105
49
113
164
150,
152
3
142
101
3
120
139
TABLE OF CASEH.
Mackenzie, Ex parte
WOK
143
Parsons )>. Hayward S-J
J AOJS
, S3
Manchester and County
Pawsey /•. Annstrong
6
Bank, Ex parte
171
Payne r. Hornby
109
Marsh v. Keating
47
Pearson r. Pearson . 112,
114
— r. Joseph
51
Pease r, Hewitt
118
Murtyn e. Gray
'>')
Philps, Ex parte
144
Marx v. Browne
4S
Pickering /•. Stephenson .
S2
Mason, In re .
L'(l
Pinet & Cie. r. Maison
Massani v. Thorley's Cattle
Louis Pinet .
23
Food Co.
23
Pini '■. Boncoroni
106
Maude. Ex parte
162
Plumer < . Gregory 4-
, 46
Maughan v. Sharpe .
23
Plumnier, lie
169
Mellersh r. Keen
92
Pooley r. Driver . 4, lc
, is
Menendez r. Holt
114
Potter /-. Jackson
132
Merchant Banking Co. of
Poulton r. L. & S. W. E.
London v. Merchants'
Co.
49
Joint Stock Bank .
23
Metcalf r. Bruin
63
Q.
Mills, Ex parte
20
Mollwo, March & Co. ,-.
Quarman e. Burnett
56
Court of Wards . 5, 1"
, 54
Montgomery v. Thompson
26
E.
Moore r. Knight
45
Morley, Ex parte . 149,
1.36
Eead c. Bailev 152, 156.
l.j.s.
Mycock r. Beatson .
121
164,
166
Beade <-. Bentley
14
X.
Eeddaway '•. Banham
26
Eeid , . Hollinshead
6
Nanson r. Gordon .
160
Ehodes e. Moules . 4(
. 4S
Natusch r, Irving
SI
Bidsrwav >. Clare 14s.
151
Neilson ,: Mossend Iron
Bitson.7?.
132
Co. 8<
i, NT
Eobinson. Ex part: 99,
1H2
Nerot v, Burnand
66
\ ..1,*..-.™
| J ( ^j
Newbigging r. Adam
121
< . - L >11 1 1. 1 LI . .
Bolfe i: Flower 61, 62, 150
Hi!)
Niemann >•. Niemann
35
Boss r. Parkvns
13
Nottingham, Ex parte
I.")!)
r. White .
132
Nowell c. Nowt'll
131
Eouse r. BradfordBankiug
Co.
60
0.
Bowe r. Wood .
7!)
liowland and Crankshaw,
Oakford r. Kuvopean and
Jle. .
a(i
American Sti'am Ship-
Buffiu, Ex part,
71
ping Co.
60
Bussell i: Caiiibefort
137
Owen, Ex parte
104
i . Bussell
N2
V.
Pinlstow Assuviiuco Asso-
St. Aubyn c. Smart .
44
I'isition
(1
St. (iobain, &c. Co. <•,
I'ugr r, Cowasjco Eduljco
ION
lloyormaun's Agency .
137,
Parkers, lie
16!)
140
TABLE OF CASES.
Salting, E.r parte
Sargood's Claim
Saunders r. Sim Life
Assoe. Co. of Canada .
P4GK
154
75
Scarf ?'. Jardine
Scott !\ Rayment
v. Rowland
Seixo v. Provezende
Shaw v. Benson
Sheen, E.r parte
Sheil, E.r parte
Sheppard, Ex parte
Shirreff v. Wilks
Siddall, Be
Sillitoe, E.r parte
Simpson, Be
(•. Chapman
Sims v. Brutton
Singer Manufacturing Co.
r. Loog
r. Wilson .
. 61
6
. 116
26
9
. 159
21
169
38
. 10
160, 162
. 149
. 122,
128
. 46
26
26
. 106
60, 100
. 10
51
. 114
. Ill
. 68
103, 104
Skipp v. Harwood
Sleech's Case .
Smith r. Anderson
v. Bailey
v. Everett
v. Hancock
v. Smith
c. Winter
Societe Generale de Paris
v. Geen . . . 169
South Wales Atlantic
Steamship Co., Re 8
Stahles <■. Eley. . . 56
Stead r. Salt . . 34, 35, 57
Steel v. Lester ... 2
Steiglitz r. Egginton . 34
Steuart r. Gladstone 82, 115
Stewart t: Blakeway . 5, 67
Stocken r. Dawson . 107, 109
Stone, E.r parte . . 173
, Be . . . .20
Stroud v. Gwyer . 127
Swire i*. Redman . . 60
Syers v. Syers . . 15, 18
T.
Taylor, E.r parte . . 20
. v. Neate . .110
PAGE
Tennant, Ex parte . . 13
Thomason v. Prere . .103
Thy nne r. Shove . . Ill
Tomlinson v. Broadsmith. 34,
138
Topping, E.v parte . 161
Travis r. Milne . . 128
Trego v. Hunt . 82, 111, 113
Trotman, Exparte . . 151
Troughton -v. Hunter . 101
Tuff, Be . . . .159
Turner v. Major . 116, 123
Turney, Exparte . . 170
Turton v. Turton . . 23
Tussaud v. Tussaud . 23
V.
Vaudrey v. Simpson . 98
Venables c. Wood . . 14
Yyse r. Poster 122, 125, 127,
128, 129
W.
Be
Waddell's Contract
Wakeham, Be .
Walker t>. Hirsch
Walton -c. Butler
Waterer v. Waterer
Watney c. Wells
Watteau v. Penwick
Wedderburn v. Wedder-
burn . . 66, 113, 124
Wegg-Prosser v. Evans . 43
144
163
0, 6
68
67
97
28
West v. Skip
Westcott, Exparte .
Whetham v. Davey .
Whincup e. Hughes
Whitcomb v. Converse
Whitwell v. Arthur .
Wickham v. Wickham
Wigram v. Cox & Co.
Wild v. Southwood .
Willett v. Blandford
Williamson, Exparte
v. Barbour
Wilson, Be Wilson v. Hol-
loway . 69, 70
e. Johnstone. 118, 119
106, 109
. 163
73, 80
. 116
131
95
57
140
lb
125
78
58
137
122
TAI'.LE OF CASES.
l'AGK
"Wilson /•. Whitehead . 1~>
Wood >>. Woad . . . H'J
Woodbridge r. Swann . 102
Worcester Com Exchange
Co. . . . 78
Worcester City, &c. Bank-
ing Co. r. Kirbank . 1 36,
137
PA (IE
Yates r. Dalton . . 32
— t: Finn . 85, 122, 123
Yonge, Er parte 156, 157, 162,
166
Yorkshire Banking ( 'o. r.
Beatson ... 30
Young, lie, E.r part- Jones 1 1
( xxi )
REFERENCES, ETC.
References to the Law Journal are now supplied for nearly all
oases cited. All cases decided by Superior Courts are also
d ated. The consecutive number of the volumes of the Law
Journal (N.S., Chancery and Common Law Series) for a given
legal year, i.e., Michaelmas term to Michaelmas term, may be
found by subtracting 30 from the year of the century in which
that legal year begins. To find the corresponding volume of the
Weekly Reporter, subtract 51.
Liudley on Partnership (6th edition, 1893) is cited by the author's
name alone.'
The Indian Contract Act (IX. of 1872) is cited by the abbreviation
I. C. A.
I have sometimes referred to my own book on " Principles of
Contract " (6th edition, 1894) for the fuller explanation of
matters belonging to that general subject rather than to the
Law of Partnership.
Matters of practice and procedure which occur incidentally in the
facts of the cases cited as Illustrations have been tacitly adapted
to the present state of the law.
A DIGEST
OF THE
LAW OF PAKTNEKSHIP
PART I.
THE PARTNERSHIP ACT, 1890.
(53 & 54 Vict. c. 39.)
[For the Arrangement of Sections, see the General Table of Contents.]
An Act to declare and amend the Law of Partnership.
[14th August, 1890.]
Be it enacted by the Queen's most Excellent
Majesty, by and with the advice and consent
of the Lords Spiritual and Temporal, and Com-
mons, in this present Parliament assembled,
and by the authority of the same, as follows :
Nature of Partnership.
1. — (1.) Partnership is the relation which sect, i.
subsists between persons carrying on a business p^n^p '
in common with a view of profit.
(2.) But the relation between members of
any company or association which is —
(a.) Kegistered as a company under the f^ 26 Viet '
PARTNERSHIP ACT, 1890.
Part i. Companies Act, 1862, or any other Act of
Sect ' l - Parliament for the time being in force and
relating to the registration of joint stock
companies ; or
(b.) Formed or incorporated by or in pur-
suance of any other Act of Parliament or
letters patent, or Koyal Charter ; or
(c.) A company engaged in working mines
within and subject to the jurisdiction of
the Stannaries :
is not a partnership within the meaning of this
Act.
Illustrations.
1. A. agrees with B. to carry the mail by horse and cart
from Northampton to Brackley on the following terms : B. is
to pay to A. £9 per mile per annum, and A. and B. are to
share the expenses of repairing and replacing the carts, and
to divide equally the money received for conveying parcels,
and the loss consequent on any loss or damage thereof. A.
and B. are partners. 1
2. A., the owner of a vessel, employs B. for some time as
skipper, and then agrees with B. that B. may take the vessel
where he likes, and engage the crew and take cargoes at his
discretion, paying to A. one-third of the net profits. A. and
B. are probably partners in the adventure.-
3. A. and B. are owners in common of a race-horse, and
agree to share its winnings and the expenses of its keep, A.
having the management of the horse and paying all expenses
in the first instance. A. and B. are not partners as to the
horse. It is doubtful whether they are partners as to the
profits that may be made by its employment. 3
1 Green v. Beesley (1835) 2 Bing. N. C. 108, 42 R. R. 539.
2 Steel v. Lnttr (1877) 3 C. P. D. 121, 47 L. J. C. P. 43 ; see
judgment of Lindley, J.
3 French v. Sti/ring (1857) 2 C. B. N. S. 357, 26 L. J. C. P. 181.
DEFINITION OF PARTNERSHIP.
4. A. and B., tenants in common of a house, and desiring to Part I.
let it, agree that A. shall have the general management, and SecTT
provide funds for putting the house in tenantable repair, and
that the net rent shall be divided between them equally. A.
and B. are not partners. 1
5. A., the proprietor of a theatre, lets the use of it to B.,
who provides the acting company and takes on himself the
whole management, A. paying for the general service and
expenses of the theatre. The gross receipts are divided
equally between A. and B. A. is not a partner with B., and
is not answerable for any infringement of dramatic copyright
in the performances given by B. under this arrangement. 3
(!. A., B., and C. agree to purchase " on joint account " the
X. estate, " each paying one-third of the cost and each having
one-third interest in it," and to form a new company to deal
with the property. This agreement does not constitute a
partnership between A., B., and C. 3
Nature of Partnership.
The definition now adopted by the legislature is the Definition of
result of a very large number of attempts made by various P artnershl P-
writers in England, America, and elsewhere. A collection
of these may be seen at the beginning of Lord Lindley's
book. Kent's (Comm. iii. 23) was the most business-
like, and I still think it was substantially accurate, and
might well have been accepted with more or less verbal
condensation and amendment.
The definition given by the Indian Contract Act, s. 239,
is Kent's in a more concise form, and runs as follows : —
Partnership is the relation which subsists between
1 Per Willes, J., 2 C. B. N. S. at p. 366. But if they furnished the
house at their joint expense, and then let portions of the house as
lodgings, they might well be partners. Letting a house is not a
business, but letting furnished rooms is.
2 Lyon v. Knowles (1863) 3 B. & S. 556, 32 L. J. Q. B. 71.
3 London Financial Association v. Kelk (1884) 26 Ch. D. 107, 143
53 L. J. Ch. 1025.
B 2
PARTNERSHIP ACT, 1890.
Part I. persons who have agreed to combine their property,
Sect. 1. labour, or skill in some business, and to share the
profits thereof between them.
Kent's definition was criticized by Jessel, M.R., in
Pooley v. Driver (1876) 5 Ch. D. at p. 472, on the
ground that there may be partners who do not contribute
any property, labour, or skill, as where a share is given to
the widow of a former partner. "Whether or not the
association requires that one or more of the partners shall
contribute labour or skill, or what they shall contribute, is
a question which may be considered as subsidiary." At
the same time a partner's share is not the less his property
because it may have been given to him for the purpose of
being used in that way, and even given out of the share
of another partner. On the other hand, division of profits,
as we shall immediately see, is not a sufficient, though it
is a necessary, test of the existence of a partnership. A
man may in sundry ways take a share of the profits of a
business without having such a share in the business as
will make him a partner. He will not be a partner unless
he has a direct and principal interest in the business, or, as
expressed in Cox v. Hickman (notes on sect. '2, below),
unless the business is conducted on his behalf.
In order to meet this criticism, I proposed, in the third
and fourth editions of the present work, the following
statement : —
Partnership is the relation which subsists between
persons who have agreed to share the profits of a
business carried on by all or any of them on behalf of
all of them.
The nearest approach to a definition which has been
given by judicial authority in England is the statement
that "to constitute a partnership the parties must have
agreed to carry on business and to share the profits in some
DEFINITION OF PARTNERSHIP.
way in common ; " 1 where " profits " means the excess of Part I.
returns over outlay. From this the new statutory defini- Sect. 1.
tion appears to have been formed. The principle, however
expressed, at once excludes several kinds of transactions
which at first sight have some appearance of partnership.
Among its applications exemplified in the cases above What is not
cited as illustrations are these : — The common ownership common ' P
of any property does not of itself create any partnership ownershl P-
between the owners ; moreover, there may be an agreement as
to the management and use of the property, and the applica-
tion of the produce or gains derived from it, without any
partnership arising. 8 On the other hand, there may be
a part ownership without partnership in the property itself,
together with a real partnership in the business of managing
it for the common benefit. 3
The sharing of gross returns, with or without a common Sharing gross
interest in property from which the returns come, does not
of itself create any partnership. 4 Even an agreement to Agreement to
bear a definite share of loss as well as take a definite share, andloss ^
of profit is not necessarily a partnership for the purpose of
giving either party the rights of a partner as against the
other, though an unqualified agreement to share profit and
loss is very strong evidence of partnership. 6 The rules
1 Mollwo, March <b Go. v. Court of Wards (1872) L. R. 4 P. C. at
p. 436.
2 Illustrations 2, 3, and 6 : — Lindley, 13, 38, 39. As to part,
owners of ships (the most common and important case), see Lindley,
34 ; Maude and Pollock on Merchant Shipping (4th Ed.), 100 ;
Maclachlan on Merchant Shipping (2nd Ed.), 90, 102 ; Kent, Com.
iii. 154, 155 ; and Stoiy on Partnership, ch. xvi. passim.
' Illustration 2 :— Cockburn, C.J., 2 C. B. N. S. 363 (1857) ; cp.
Crawshay v. Maule (1818) 1 Swanst. at p. 523, 18 R. R. at p. 136 ;
Steward v. Blakeway (1869) L. R. 4 Ch. 603.
4 Illust. 5.
' Walker v. Hindi (1884) 27 Ch. Div. 460, 54 L. J. Ch. 315.
PARTNERSHIP ACT, 1890.
Part I,
Sect. 1.
Specific per-
formance of
partnership
contracts.
" Joint ad-
venture."
stated in this and the foregoing paragraph are now declared
by the Act itself in sect. 2, which see. It is practically
more important to exclude from the definition these
relations more or less resembling it at first sight than to
make the definition affirmatively complete.
The remedy of specific performance is generally not
applicable to an agreement to enter into partnership : for
" it is impossible to make persons, who will not concur,
carry on a business jointly for their own common advan-
tage." But where such an agreement has been acted on,
the execution of a formal deed recording its terms may be
ordered by way of specific performance if necessary to do
justice between the parties. 1
Scottish writers make a difference between partnership
proper and "joint adventure," which is thus defined in
Bell's Principles, art. 392 :—
Joint adventure or joint trade is a limited partner-
ship, confined to a particular adventure, speculation,
course of trade, or voyage; and in which the partners,
either latent or known, use no firm or social name,
and incur no responsibility beyond the limits of the
adventure.
I do not find that the incidents of a "joint adventure,"
as far as it extends, can be distinguished from those of
partnership ; but, whatever the importance of the distinc-
tion may be, it is not met with in the English authorities. 3
Scott v. Rayment
Pawseij v. Armstmnti (1881) 18 CU. I). 698. cannot now be relied on ;
see the remarks of the Lords Justices on it in Walker v. Hirsch.
1 Kni/land v. Citriimj (1844) 8 Beav. 129, 137
(1868) L. R. 7 Eq. 112.
- Lord Eltlon seems to have denied it. ;$ Dow, at p. 229. Trans-
actions of this kind, when they occur in England, are dealt with, so
far as they extend, in the same way as ordinary partnerships : see
Ueid v. HaUimhatd (1825) 4 B. & C. 867, 28 B. B. 488.
DEFINITION OF PARTNERSHIP. ,<
We may compare with "joint adventure " the *' association Part i.
en participation " recognized by French law (Code de Sect. 1.
Comm. 47 — 50). But this seems to include transactions
which, according to our rules, are not partnerships at all,
such as the purchase of goods on common account to be
divided among the associates. See the collection of autho-
rities in the Codes Annotes. In the same way societe is
a wider term than our " partnership." It covers such
matters as the sharing of benefit derived from the common
use of enjoyment of anything by owners or tenants in
common.
It will be observed that by sect. 45 of the Act, » Business."
"business" includes every trade, occupation, or profession.
This, of course, does not abrogate or vary any rule of law
or judicially recognized usage which forbids any particular
occupation or profession to be exercised in partnership,
e.g. the profession of a barrister.
The provision of sect. 1, sub-sect. 2, is made necessary Exclusion of
by the fact that there are many joint-stock companies and and associa-
other associations, established for the purpose of carrying tl0 " s °°*
on business and with a view to profit, which come within ordinary law
the general conception of partnership, and indeed are sn i p .
within the terms of almost every definition that has been
attempted, but, for reasons of policy and convenience, or
in some cases in consequence of their peculiar origin and
history, are governed by special regulations and not by
the law which governs ordinary private partnerships.
These are therefore excluded from the scope of the present
Act. A similar provision, upon which this is modelled, is
in the Indian Contract Act, s. 266. The great substantial
difference between partnerships and companies is that an
ordinary partnership is founded on personal confidence
between the partners, and gives every partner equal rights
in the conduct of the business, as we shall • see hereafter,
PARTNERSHIP ACT, 1890.
Part I.
Sect. 1.
Limits to
number of
partners in
private
partnership.
unless there is an express agreement to the contrary. A
commercial company, on the other hand, is regularly com-
posed of a minority of active members, designated as
directors or by some other name of office, and of a
majority who need not and most commonly do not know
anything of one another, and have no part in the ordinary
conduct of the business. 1
By the Companies Act, 1862, 2 a private partnership
cannot be formed of more than ten persons for banking,
or twenty for any other business.
At common law there was no limit to the number of
persons who might enter into partnership, and it is the
better opinion 3 that there was nothing to prevent them, as
a matter of law, from dividing the capital into transferable
shares, and acting as a joint-stock company ; but there
were always great practical inconveniences about this. A
partnership not complying with the conditions of the
Companies Act is now illegal, and the members of such
an association would be unable to enforce any claim arising
out of the partnership dealings, although they would be
individually liable for the debts of the concern to a creditor
who had dealt with the firm without notice of the state
of things making its business illegal.*
Associations carrying on that which at common law
would be a partnership business, but exceeding the number
of ten in the case of banking, and twenty in the case of
1 See Lindley, 21.
2 25 & 26 Vict. c. 8!), s. 4.
3 Lindley on Companies, 135, 136.
* See Lindley, 111. A creditor who has notice, e.g. a solicitor who
has rendered professional services in forming and carrying on the
association, knowing the number of members to exceed twenty, cannot
recover : lie S. U'ahs Atlantic Steamship Co. (1875-6) 2 Ch. Div. 763
-J(i L. J. Oh. 177.
DEFINITION OF PARTNERSHIP.
any other business, and complying with the law by coming Part. I.
within one of the special categories laid down in the Sect. 1.
■Companies Act (substantially identical with those of the
sub-section now before us), may be called extraordinary
partnerships. They are governed by special rules of law,
for the most part statutory, which we shall not here enter
upon. The statutes, however, are to a considerable extent
founded upon the principles of ordinary partnership law,
so that they cannot be sufficiently understood without a
knowledge of those principles.
Of the kinds of extraordinary partnerships above specified,
the class (a) are necessarily corporations, the association
being made an artificial person with rights and duties
distinct from those of the natural persons who at any
given time are members of it.
The class (b) are generally but not necessarily 1 incor-
porated.
The class (c) are in no case incorporated, but are
ordinary partnerships modified by local custom, and since
1869 by statute also. 3
It may be useful to note here that there are associations
which, though not partnerships, yet exist for the acquisi-
tion of gain by their members within the meaning of the
Companies Act, and are therefore unlawful if not regis-
tered: for example, a mutual marine insurance association, 3
Or mutual benefit 4 or loan 5 society. On the other hand,
i 1 By 7 Wm. 4 & 1 Vict. c. 73, the Crown may establish companies
by letters patent without incorporation.
2 The Stannaries Act, 32 & 33 Vict. c. 19, amended by 50 & 51
Vict. c. 43.
3 Padstow Assurance Association (1882) 20 Ch. Div. 137, 51 L. J.
Ch. 344.
. " Jennings v. Hammond (1882) 9 Q. B. D. 225, 51 L. J. Q. B. 493.
5 Shaw v. Benson (1883) 11 Q. B. Div. 563, 52 L. J. Q. B. 575.
10
PARTNERSHIP ACT, 1890.
Part I.
Sect. 2.
.Rules for
determining
existence of
partnership.
societies may be formed for such purposes as investment
of money, or buying property and re-selling it to the
individual members, which are neither partnerships nor
for the acquisition of gain on a common account ; and
such societies do not need registration even if the number
of members exceed twenty. 1
2. In determining whether a partnership
does or does not exist, regard shall be had
to the following rules :
(1.) Joint tenancy, tenancy in common, joint
property, common property, or part owner-
ship does not of itself create a partnership
as to anything so held or owned, whether
the tenants or owners do or do not share
any profits made by the use thereof.
(2.) The sharing of gross returns does not
of itself create a partnership, whether the
persons sharing such returns have or have
not a joint or common right or interest in
any property from which or from the use
of which the returns are derived.
(3.) The receipt by a person of a share of the
profits of a business is prima facie evidence
that he is a partner in the business, but
the receipt of such a share, or of a payment
contingent on or varying with the profits,
of a business, does not of itself make
1 2.V Siddall (1885) 29 Ch. Div. 1, 54 L. J. Ch. 682 ; cp. Smith
Anderson (1880) lo Ch. 1). l'47, 50 L. .1. Ch. 31).
DEFINITION OF PARTNERSHIP. H
him a partner in the business ; and in Fart i,
particular — sect. 2.
(a.) The receipt by a person of a debt or
other liquidated amount by instal-
ments or otherwise out of the accruing
profits of a business does not of itself
make him a partner in the business or
liable as such:
(b.) A contract for the remuneration of a
servant or agent of a person engaged
in a business by a share of the profits
of the business does not of itself make
the servant or agent a partner in the
business or liable as such :
(c.) A person being the widow or child
of a deceased partner, and receiving
by way of annuity a portion of the
profits made in the business in which
the deceased person was a partner, is
not by reason only of such receipt a
partner in the business or liable as such :
(d.) The advance of money by way of
loan to a person engaged or about to
engage in any business on a contract ■•
with that person that the lender shall
receive a rate of interest varying with
the profits, 1 or shall receive a share of
1 A contract to pay a fixed sum " out of the profits " is equivalent
to a contract to pay a share of the profits arising from the business :
In re Young, Ex parte Jones [1896] 2 Q. B. 484, 65 L. J. Q. B. 681.
12 PARTNERSHIP ACT, 1890.
Parti. the profits arising from carrying on
sect. 2. the business, does not of itself make
the lender a partner with the person
or persons carrying on the business or
liable as such. Provided that the
contract is in writing, and signed by
or on behalf of all the parties thereto :
(c.) A person receiving by way of annuity
or otherwise a portion of the profits
of a business in consideration of the
sale by him of the goodwill of the
business is not by reason only of such
receipt a partner in the business or
liable as such.
North J. has judicially stated, after careful examination,
that this section, and in particular sub-sect. 3, did not
make any change in the law as already settled. There is
no doubt that the intention was simply to declare the law
as it stood. 1
Illustrations,
A. As to sub-sects. 1 and 2. See illustrations and
commentary to sect. 1 above.
B. As to tlw general enactment of sub-sect. 8.
Rule in Coibt. 1- A trader is indebted to several creditors, and they enter
Hickman, and i n t„ an arrangement with him bv which the trade is to be
later applica- , , n , , . . ' ,
tioiis. conducted under their superintendence, and they are to be
giadually paid off out of the profits. These creditors do not
thereby become partners of the debtor in his trade, or liable
for iho debts of the concern : for " the real grouud of the-
1 Jhwin v. Varis [1894] 1 Oil. 393, 399, 401, 63 L. J. Ch. 219.
DEFINITION OF PARTNERSHIP. 13
liability," where such liability exists, " is that the trade lias Part I.
been carried on by persons acting on his behalf;" 1 and in sect. 2.
the case of such an arrangement as this, the trade is not
carried on by or on account of the creditors. The test of
liability is not merely whether there is a participation of
profits, but whether there is such a participation of profits as
to constitute the relation of principal and agent between the
person taking the profits and those actually carrying on the
business. 3
2. C. H. becomes security for £10,000 for his son W. H.,
on "W. H. becoming a member of Lloyd's. "W. H. agrees in
writing with 0. H. that, among other things, S. and no other
person shall underwrite in the name of W. H. ; that S. shall
be paid £200 a year and one-fifth of the net profits of under-
writing ; that C. H. may withdraw his security on notice, and
S. shall thereupon cease to underwrite for *W. H. ; and that
one-half of the net profits, after deducting the share of S.,
shall, together with the sum of £25 per annum, be considered
as owing and be paid to C. H. by W. H. Under this agreement
C. H. is not a partner but a creditor of W. H. 3
3. A partnership is entered into for a term certain, and it
is provided by a clause in the articles that if a partner dies
before the end of the term his representatives shall during
the rest of the term receive the share of profits he would
have been entitled to if living : a partner having died, his
1 Cox v. Hickman (1860) 8 H. L. C. 268, 306 (the leading case
which puts the law on its present footing). The principle of Cox v.
Hickman is not confined to partnership cases. The H. L. , reversing
the majority of the C. A., applied it to a case where it was sought to
make trustees for debenture-holders liable as undisclosed principals
for the contracts of a receiver whom they had appointed under their
powers : Gosling v. Gaskell [1897] A. C. 575, 66 L. J. Q. B. 848.
2 Lord Wensleydale in Cox v. Hickman (I860) 8 H. L. C. at
pp. 312-3 ; Blackburn, J., in Bullenv. Sharp (1865) (Ex. Oh.) L. R.
1 C. P. at pp. 111-12 ; Cleasby, B., lb. at p. 118 ; and further on the
effect of Cox v. Hickman, Bramwell, B., lb. at p. 127.
3 Ex parte Tennant (1877) 6 Ch. Div. 303. Compare Bullen v.
Sliarp (1865) (Ex. Ch.) L. R. 1 C. P. 86, 35 L. J. C. P. 105, a
somewhat similar case, where there was no actual division of profits.
14 PARTNERSHIP ACT, 1890.
Parti. share of profits is paid from time to time to his executors
s eo t. 2. under this agreement ; the executors do not thereby become
partners. 1
4. The business of an underwriter is conducted by A. in the
name of B., and A. receives a fixed salary and one-fifth of the
profits, subject as to this one-fifth to be wholly or partially
refunded in the event of unexpected losses becoming known
after the division of profits in any year. The contract between
A. and B. is not one of partnership, but of hiring and
of service. 3
5. A creditor, J., makes an agreement with his debtors, T.
and W., by which the sum due to him is to be paid out of the
profits of a building speculation to be executed by T. and W.,
J. furnishing that part of the materials which belongs to his
own trade ; and after payment of the debt, and paying for
these new materials, the surplus is to belong to T. and W.
J. does not become a partner of T. and W., and is not liable
for the price of goods ordered by them for the purpose of
being used in the building. 3
6. A., a publisher, agrees to publish at his own expense a
book written by B., and to pay to B. half the net profits, if
any, as ascertained by a certain conventional method of
taking accounts. It is doubtful whether this does or does
not constitute a partnership between A. and B. ;* but B. is
not liable to a paper-maker for paper supplied to A. for the
general purposes of A.'s publishing business, and used for
printing B.'s book. 6
1 Holme v. Hammond (1S72) L. R. 7 Ex. 218, 41 L. J. Ex. 157.
2 Ross v. Parlytis (1875) L. R. 20 Eq. 331, 44 L. J. Ch. 610.
3 Kilshaw v. Jul-es (1863) 3 B. & S. 847, 32 L. J. Q. B. 217.
4 In JiWc v. Btnitlry (1858) 4 K. & J. 656. Lord Hathevley, then
V.-O. Wood, seems to have thought the " half-profits" contract did
create a partnership. Lord Lindley (On Partnership, 48, note (d) )
thinks otherwise. So did tin- Court in the Scottish case of VenabUs
v. Wnttd, there cited liy him (see next note) ; but there, even if there
had heen a partnership, it was very difficult to make out that the
debt sued for was a partnership debt.
5 Vnmhles v. Wood (1839) 3 Ross, L. C. on Commercial Law,
DEFINITION OF PARTNERSHIP. 15
C. As to the cases provided for under the special clauses Part I.
of sub-sect. 3. Sect. 2.
7. A., the proprietor of a music-hall, signs and gives to B.,
in consideration of an advance of £250, a paper in the following
terms : "In consideration of the sum of £250 this day paid
to me, I hereby undertake to execute a deed of co-partnership
to you for one-eighth share in the profits of the 0. music-hall,
to be drawn up under the Limited Partnership Act of 28 & 29
Yict. c. 86." 1 This is not a contract for a share of profits
within the Act, but constitutes a partnership at will, in which,
as between A. and B., B. is to share profit without being liable
for loss. 3
8. B. & Co. are traders in partnership. A. lends money to
the firm on a contract in writing, under which B. & Co. agree,
among other things, to repay the loan at the end of the part-
nership, to conform to the partnership deed, which is to be
open to A.'s inspection, and to pay annually on account of
profits a definite share of net profits during the continuance of
the loan. The agreement also contains a provision that in the
event of A.'s bankruptcy B. & Co. may pay off the loan and
determine the agreement, a provision for settlement of accounts
at the end of the partnership, and payment of the loan and
stipulated share of profits out of assets, subject to the refunding
by A. of any sum not exceeding the amount of the original
advance which may appear to have been overpaid on account
of profits, and an arbitration clause. The agreement expressly
purports to be for an advance by way of loan under the pro-
visions of 28 & 29 Vict. c. 86. 1 This transaction is merely v
colourable as a loan, and is not within the Act, and A. is
lisible as a partner for the debts of B. & Co. 3
529 ; cp. Wilson v. Whitehead (1842) 10 M. & W. 503, 12 L. J.
Exch. 43.
1 The present clause (d) of sub-sect. 3 is equivalent to sect. 2 of
this Act, which it superseded. The Act of 28 & 29 Vict, is repealed
by the principal Act (s. 48, below).
2 Syers v. Syers (1876) 1 App. Ca. 174.
f Pooley v. Driver (1876) 5 Ch. D. 458, 45 L. J. Ch. 466.
16 PARTXERUHll' ACT, 1890.
Part I. 9- A., B., and 0. enter into an agreement in writing,
Sect. 2.™ expressly referring to 28 & 29 Vict. c. 8G, 1 and reciting that
A. and B. have agreed to become partners in a certain business,
and have requested C. to lend them £10,000 to be invested in
it. The agreement declares that the money is advanced by
C. to A. and B. by way of loan under the 1st section of the
Act, and such advance shall not be considered to make C. a
partner. This sum of £ 1 0,000 appeara by the agreement to
be, and in fact is, the whole capital of the business.
By other clauses of the agreement C. is entitled to inspect
the books and receive a copy of the annual account, and to
share profits in a fixed proportion, and has the option of
demanding a dissolution of the partnership and conducting
the liquidation of the business in certain events. C.'s capital
invested in the business is not to be withdrawn till the termi-
nation of the partnership. Under this agreement C. is a
partner with A. and B. 2
General The first section has laid down in general terms what
the'idea'of ° partnership is. The second section guards the principle
partnership, enunciated in the first. It excludes, in the first and
second sub-sections, various relations of two or more
persons to property held jointly or in common, and the
returns derived from such property, which at first sight
may appear to resemble partnership, hut do not really
satisfy the fundamental condition of "carrying on a
business in common with a view of profit." As a matter
of history, the conception of partnership has been worked
out in our Courts through the necessity of attending to
distinctions of this kind. It has therefore been thought
convenient to preserve the original arrangement of this
work for purposes of exposition, and give the authorities
by which this distinction is established at the very outset
1 See note ', last pn^e,
' Kj: parte Lklhasse. (1877-8) 7 Oh. Div. 511, 47 L. J. Ch. 65.
RULES AS TO PARTXEUSIIIP. yf
of the subject, in the commentary on sect. 1, though in Part I.
the Act their effect is stated in sect. 2. Sect. 2.
The third sub-section has a very different history, special pro-
visions tis to
From the latter part of the eighteenth till past the middle sharing
of the present century the prevailing doctrine was that pl ° ts '
anyone who shared in the profits of a business (at all
events profits in the correct sense, net profits as opposed
to gross returns, or gross profits as they were sometimes
improperly called) must be liable as a partner. 1 The
decision of the House of Lords in Cox v. Hickman 3 showed
this doctrine to be erroneous. The true doctrine, as laid
down in recent authorities, and now declared by the Act,
is that sharing profits is evidence of partnership, but is not
conclusive. We have to look not merely at the fact that
profits are shared, but at the real intention and contract
of the parties as shown by the whole facts of the case. 3
Where one term of a contract creates a right to share
profits, it is not correct to take that term as if it stood
alone and presume a partnership from it, and then construe
the rest of the agreement under the influence of that pre-
sumption. Sharing profits, if unexplained, is evidence of
partnership : but where there is an express agreement the
agreement must from the first be looked to as a whole
to arrive at the true intention. 4
It took several years, however, to work out the con-
sequences of Cox v. Hickman? For some time they were
still imperfectly understood, even by some of the noble
and learned persons who had taken part in the decision.
1 Se? the authorities epitomized, Liudley, 50 — 54.
" P. 12, ahove.
3 Mollwo, March & Co. v. Court of Wards (1872) L. R. 4 P. C. 419,
435.
4 Badeley v. Consolidated Bank (1888) 38 Ch. Div. 238, 57 L. J. Ch.
468 ; Davis v. Davis [1894] 1 Ch. 393, 399, 63 L. J. Ch. 219.
P. C
18 PARTNERSHIP ACT, 1890.
Part I. Various attempts were made by private persons to procure
Sect. 2. Parliament to pass Bills for authorizing limited partner-
ships such as have long been allowed in the United States,
after the pattern of the Continental societe en commandite.
These attempts were so far effectual as to lead to the
Ministry of the day framing and passing, in 1865, an Act,
sometimes cited as Bovill's Act, 1 which was then supposed
by every one concerned to make a material change in the
law, but really added little or nothing to the effect of Cox
v. Hickman. The provisions of this Act, repealed and
re-enacted by the principal Act, are exhibited in the
sub-section now before us in their proper connexion, as
rules for particular cases under a more general rule, which
are of special practical importance, but which do not
prevent or limit the application of the general rule to
other analogous cases. On the other hand, the Act is not
intended to protect, and will not protect, persons who
attempt to combine the powers of a partner with the
immunities of a creditor by means of nominal loans.
There must be not only an advance of money to the
business, but a loan to a real debtor who is personally
liable. 3
The proviso at the end of clause (d) is more explicit
than the corresponding words in Bovill's Act. 3
" Prima It is to be regretted that the learning and scholarship of
facie."
both Houses of Parliament has not been able to devise a
better English equivalent for the barbarous "prima facie,"
which, though common and convenient in everyday profes-
sional usage, is hardly becoming in an Act of Parliament,
1 28 & 2il Vict, o, 86.
2 See illustrations 7, 8, 9, above.
;l As to which see Si/crx v. Sims (1876) 1 App. Ca. 174 ; Pooley v.
I hirer (1876) 5 Oh. D. at p. 468.
BIGHTS OF PERSON LENDING, ETC. IN INSOLVENCY. 19
and, not being a term of art known to the law, is capable Part I.
of leading to ambiguity. 1 Sect. 3.
3. In the event of any person to whom Postponement
money has been advanced by way of loan person lend-
upon such a contract as is mentioned in the L considera-
i . n - , • r. -, j. tion of share
last toregomg section, or of any buyer of a f profits in
goodwill in consideration of a share of the °ency £mso1 "
profits of the business, being adjudged a bank-
rupt, entering into an agreement to pay his
creditors less than twenty shillings in the
pound, or dying in insolvent circumstances,
the lender of the loan shall not be entitled
to recover anything in respect of his loan, and
the seller of the goodwill shall not be entitled
to recover anything in respect of the share of
profits contracted for, until the claims of the
other creditors of the borrower or buyer for
valuable consideration in money or money's
worth have been satisfied.
This section corresponds to sect. 5 of Bovill's Act, and the
decisions on that section will still be applicable.
The creditor who has lent money in consideration of a Exclusion of
share of profits is excluded absolutely and according to ?™ profits ™~
the literal terms of the Act from competing with other from compe-
r ° tition with
creditors. It does not matter whether they were or were others is
not creditors during the continuance of the loan, nor
whether they were creditors in the business or not. Nor
can such a creditor prove his debt in the bankruptcy until
1 See Davis v. Davis, note *, p. 17, above.
G 2
20 PARTNERSHIP ACT, 1890.
Part I. all the other creditors are paid. 1 But if, during the same
Sect. 3. ^ time, he has lent other sums at a fixed rate of interest, he
may recover those sums like any other creditor. 2 A con-
tinuation of what is substantially the same advance with
a variation of terms will not exclude the operation of this
enactment. 3 If it were sought to evade this prohibition
and make the Act an instrument of fraud, by advancing
a small sum in consideration of a large share of profits,
and a large sum at fixed interest, the lender would probably
be treated as a partner. 4 The operation of this section
is not excluded by lending money for fixed interest and
a sum equal to a specified share of profits, and calling that
additional sum a salary. 5
This express postponement of the creditor receiving a
share of profits has the effect of putting him approximately
in the position of a true limited partner, or commanditaire
iu the French terminology. For some reason which I
have never been able to understand, people in this country
seem to find almost invincible difficulty in grasping the
conception of a partner with limited liability who, being
a true partner, is not a creditor of the firm at all, so that
there can be no question of his competing with creditors
in respect of his capital. Yet the position of a shareholder
in a limited company (which is essentially the same thing)
is now quite familiar.
1 Ex parte Taylor, In re Grown (1879) 12 Ch. Div. 366, 379;
followed in In re Mason, note i , below.
" E,c parte Mills (18731 L. B. 8 Ch. 569.
3 Re Hildesheim [1893] 2 Q. B. 357 (on BoviU's Act). So where on
dissolution of a partnership a loan was continued on the same terms
to one partner who took over the business, and he afterwards became
bankrupt, the lender was postponed : In re Mason, E.x parte Bing
[1899] 1 Q. B. S10, t>8 L. .1. Q. B. 460.
•' E,r V arte Mills (1873) L. B. 8 Ch. at pp. ;>74-6.
" /.'(■ Stone (1S8U) 33 Ch. 1). 541, 55 L. J. Oh. 795.
MEANING OF FIRM. 21
It is to be observed that this section " does not deprive Parti,
the lender of any security he may take for his money;" sect. 4.
if he has taken a mortgage, for instance, his rights as
mortgagee are not affected, 1 and he may enforce any such
security by way of foreclosure or sale. 3
4. — (1.) Persons who have entered into Meaning of
partnership with one another are for the
purposes of this Act called collectively a firm, 3
and the name under which their business is
carried on is called the firm-name.
(2.) In Scotland a firm is a legal person
distinct from the partners of whom it is
composed, but an individual partner may be
charged on a decree or diligence directed
against the firm, and on payment of the debts
is entitled to relief pro rata from the firm and
its other members.
The law of England knows nothing of the firm as a Firm not
body or artificial person distinct from the members com- ^artificial
posing it, though the firm is so treated by the universal P ers ° n j?
practice of merchants and by the law of Scotland. In
England the firm-name may be used in legal instruments
both by the partners themselves and by other persons as
a collective description of the persons who are partners in
the firm at the time to which the description refers : 4 and
1 Linclley, 59 ; Ex parte Shell (1877) 4 Oh. Div. 789, 46 L. J. Bky.
62.
2 Badeley v. Consolidated Bank (1888) 38 Ch. Div. 239, 57 L. J. Ch.
468 (affirming on this point the decision below, 34 Oh. D. 536).
3 Op. I. C. A. s. 239.
4 Lindley, 120.
22
PAHTNERKHIP ACT, 1890.
Part I.
Sect. 4.
Otherwise in
Scotland.
What use of
names is
lawful.
under the Rules of the Supreme Court actions may now
be brought by and against partners in the name of their
firm. 1 An action between a partner and the firm, or
between two firms having a common member, was impos-
sible at common law, and until 1891 it remained open
to doubt whether such actions were possible since the
Judicature Acts ; but they are now expressly authorized
by the Rules of Court. 2 Nevertheless, the general doctrine
that "there is no such thing as a firm known to the law" 3
remains in force. In Scotland, on the other hand, the
firm is, and has long been, a " separate person"; not only
can it sue and be sued in the " social name," but it may
sue and be sued by its own members, and firms having
one or more members in common may sue each other
apart from any statutory authority. 4
The rules governing the use of firm or trade names
obviously belong, properly speaking, not to the law of
partnership, but to that sub-division of the general law
of property which has to do with copyright and other
analogous rights. Still it is thought that some short
remarks upon them may be useful in this place.
Generally speaking, every man is by the law of England
free to call himself by what name he chooses, or by
different names for different purposes, 6 so long as he does
1 Order XLVIIIa. r. 1, &e. See Part II., below, p. 135.
2 Order XLVIIIa. r. 10.
8 James, L.J., Kcparte Gorbett (18S0) 14 Ch. Div. at p. 126.
4 Bell, Pr. ill' Law of Scotland, § 3C>7 ; Second Report of the Mer-
cantile Law Commission, 18, 141. Where the Ami-name is merely
descriptive and impersonal, however, as " The Carron Iron
Company," some of the members must be joined by name in the
action.
6 See the note in 3 Daw t'onv. pt. i. 357—362 ; Davie* v. Loimdes
(1835) 1 Bing. N. C. 5H7, 618. Strictly speaking, this does not apply
to names of baptism. The same or greater freedom existed in the
MEANING OF FIRM. 23
not use this liberty as the means of fraud or of interfering Part I,
with other substantive rights of his fellow-citizens. And Sect. 4.
this extends to commercial transactions as well as to the
other affairs of life : " Individuals may carry on business
under any name and style they may choose to adopt." 1
The style of the firm need not and often does not express
the name of any actual member of it. It may contain, and
often does contain, other names, or no individual names
at all. On the other hand, although no man is to be
prevented from carrying on any lawful business in his own
name by the mere fact of his name and business being
like another's, 3 yet the mere fact of the name itself being
his own does not give him any right or licence to do so
with such additions or in such a manner as to deceive the
public, and make them believe they are dealing with some
one else. 3
It is said to be an offence against the prerogative of the Assumption
Crown for private persons to " assume to act as a corpora- nam J p
tion." But it is by no means clear how it can be punished
(though possibly the Queen's Bench Division may have
jurisdiction to punish it by fine). 4. And at all events the
Roman law, which allowed a change of nomen, prcenornen, or cognomen
alike. C. 9, 25, de mutat. nom. 1.
1 Per Erie, O.J., Maughan v. Sharpe (1864) 17 C. B. N. S. at
p. 462, 34 L. J. C. P. 19 ; and see remarks of Jessel, M.R., in
Merchant Banking Go. of London v. Merchants Joint Stock Bank
(1878) 9 Ch. D. 560 ; Levy v. Walker (1879) 10 Ch. Div. 436, 445.
2 Burgess v. Burgess (1853) 3 D. M. G. 896 ; Turton v. Turton
(1889) 42 Ch. Div. 128, 58 L. J. Ch. 677 ; Saunders v. Sun Life
Assurance Co. of Canada [1894] 1 Ch. 537, 63 L. J. Ch 247.
3 Holloway v. Holloicay (1850) 13 Beav. 209 ; Massam v. Thorley's
Cattle Food Co. (1880) 14 Ch. Div. 748 ; Tussaud v. Tussaud (1890)
44 Ch. D 678, 59 L. J. Ch. 631 ; F. Pinet &■ Cie. v. Maison Louis
Pinet [1898] 1 Ch. 179, see per North, J., at p. 181.
4 The attempt to establish a guild or " communa " without war-
rant was formerly punishable by fine. Madox, Hist. Ex. i. 562,
'24
PARTNERSHIP ACT, 1890.
Part I.
Sect. 4.
Foreign laws
as to trade
names.
Exclusive
right to trade
names analo-
gous to pro-
perty in trade
mark.
use of a description such as " Company," which by
common usage is applicable to incorporated and unincor-
porated associations alike, does not amount to the offence
in question. 1
The laws of Continental states are much more strict and
definite as to the use of trade names. In France the
style of a commercial firm (raison sociale) must contain no
other names than those of actual partners. 3 In Germany
it must, upon the first constitution of the firm, contain the
name of at least one actual partner, and must not contain
the name of any one who is not a partner ; 3 but when the
name of the firm is once established in conformity with
these rules, it may be continued notwithstanding an assign-
ment of the business, or changes in the persons who are
partners for' the time being, subject to certain consents
being given.*
But although " in this country we do not recognize the
absolute right of a person to a particular name to the
extent of entitling him to prevent the assumption of that
name by a stranger," yet " the right to the exclusive use
of a name in connexion with a trade or business is familiar
gives several instances from 26 H. 2. Many of these '• adulterine
guilds,'' as they are called, in London and Middlesex ; the burgesses
of Totnes and of Bodmin ; and Ailwin the mercer and other towns-
men of Gloucester, were amerced in considerable sums on this
account. See Stubbs, Const. Hist. i. 418. It can be hardly be said,
however, that these bodies " assumed to act as corporations " in the
modern technical sense.
1 Lindley, 101. Every European place of business is called com-
pany by illiterate natives in the Presidency towns of India.
2 Code de Commerce, 21. For the French law as to the use of
family names generally, see Du Boulai/ v. Du Boulay (1869) L. R 2
P. 0. 430.
J Handelsgesetzbuch, 17.
1 Handidsgesetzbuch, 2:5, 2J.
MEANING OF FIRM. 25
to our law." 1 This right is analogous to, but not identical Parti,
with, the right to a trade mark proper. The right of the Sect. 4.
possessor of a trade mark in the strict sense (which is now
subject to statutory conditions under the Patents, Designs,
and Trade Marks Act, 1883, 46 & 47 Vict. c. 57), is to
prevent competitors from trading on his reputation, and
passing off tbeir wares as his own by means of copies or
colourable imitations of the visible sign or device which he
has appropriated to his business ; and the right of the
possessor of a trade name stands on the like footing.
" The principle upon which the cases on this subject
proceed is not that there is property in the word, but that
it is a fraud on a person who has established a trade, and
carries it on under a given name, tbat some other person
should assume the same name, or the s .me name with a
slight alteration, in such a way as to induce persons to deal
with him in the belief that they are dealing with the person
who has given a reputation to the name." ~
The right to a particular name may likewise be infringed May be
" „ infringed by
circuitously by means of a trade mark or description fitted means of
,."_. , . , t , ■ trade marks
to bring goods into the market under a deceptive name. apart from
In such a case the first appropriator of the name has his ^"g"^,
remedy no less than if the name bad been directly adopted as such.
by his rival, and it is no answer to his complaint to say
that there is no such physical resemblance between the
trade marks as would deceive a customer of ordinary
caution. The trade mark complained of may be free from
■offence in its primary character and office as a visible
1 Da, Boulay v. Du Boulay (1869) L. E. 2 P. C. 430, 441.
2 Giffard, L.J., in Lee v. Haley (1869) L. R. 5 Ch. at p. 161, 39
L. J. Ch. 284. The same principle has been acted on by the Courls
•of Fiance: Sirey, Codes Annotes, >on Code de Commerce, 18, 19,
no. 46 of note.
2(5
1'AIITNERXIIIP ACT, 1890.
Part I.
Sect. 4.
Whether
action lies
against cor-
poration for
trading in its
corporate
name, where
the name
itself is an
infringement
of existing
trade name.
symbol ; but that will be no excuse for a breach of the
distinct duty to respect the trade names as well as the
trade marks of other dealers. 1 And (on the principle that
a man is not allowed to ignore the natural consequences of
his acts) it is immaterial whether there be any fraudulent
intention or not. 3
Where a name of incorporation is such us to be, if used
for trading purposes, an infringement of an existing trade
name, it is doubtful whether an action can be maintained
against the corporation for trading in its corporate name,
or whether the only remedy is not against those persons
individually who procured that name to be given. 3 But
such an action, it is submitted, may well lie. For though
it may be true that the corporation has no power to trade
under any other name than its proper name of incorpora-
tion, yet it is in no way bound to trade at all ; and if it has
a name under which it cannot trade without interfering with
1 Seixo v. Provezende (1865) L. E. 1 Oh. 192. The leading autho-
rities on this and the allied subjects of trade marks are collected in
Cope v. Evans (1874) L. B. 18 Eq. 138 ; see too the explanations and
distinctions given in {finger Manufacturing Co.y. Wilson (1876) 2Ch.
Div. at pp. 441 seq., by Jessel, M.E., and S. C. in C. A. ib. 451 seq. ;
and further, on the subject generally, per Lord Blackburn, Singer
Manufacturing Co. v. Loog (18&?1 S App. Ca. 15, -29, 52 L. J. Ch.
481. Our Courts have often had i;reat difficulty in drawing the line
between legitimate protection ot one's business identity, if one may
so speak, and attempts to monopolize elements of commercial value
at the expense of other traders no less entitled to make use of them.
See Eno v. Dunn (1890) 15 App. Cn. 252 ; Montgomery v. Thompson
[1891] A. 0. 217, 60 L. J. Ch. 757. The literal correctness of a
description is not enough to justify its use if it is in fact deceptive :
Ji'eMainiyv. Bavliam [1896] A. C. 199, 65 L. J. Q. B. 381.
- Heiuli-ik* v. Mmitugu (1881) 17 Ch. Div. 638, 651. 50 L. J. Ch.
188.
Lanvoii v. lunik of London (1856) 18 V. 11. N. S. 84, 25 J,. J. C. P.
POWER OF PARTNER TO BIND THE FIRM. 27
other persons' rights, that is its misfortune, but can surely Part I.
make no difference to their rights. 1 Sect. 5.
There can be no trade name unless in connexion with $° tlade
.... , . name with-
an existing business. A man cannot appropriate a name out actual
for this purpose by the mere announcement of his intention busmess -
to trade under it. 2
Relations of Partners to Persons dealing with them.
5. Every partner is an agent of the firm Power of
and his other partners for the purpose of the wndthe firm,
business of the partnership; and the acts of
every partner who does any act for carrying
on in the usual way business of the kind carried
on by the firm for which he is a member bind
the firm and his partners, unless the partner so
acting has in fact no authority to act for the
firm in the particular matter, and the person
with whom he is dealing either knows that he
has 3 no authority, or does not know or believe
him to be a partner.
" Generally speaking, a partner has full authority to deal
with the partnership property for partnership purposes." 4
" Ordinary partnerships are by the law assumed and
presumed to be based on the mutual trust and confidence
of each partner in the skill, knowledge and integrity of
every other partner. As between the partners and the
outside world (whatever may be their private arrange-
ments between themselves), each partner is the unlimited
1 See Hendriks v. Montagu (1881) 17 Ch. Div. at p. 647.
2 Lawson v. Bank of London, note J , Jast page.
3 Cp. I. C. A. 251.
4 Lord Westbnry in Ex parte Burlington, d-c. Banking Co. (1864)
4D. J. S. 581, 585.
28 PARTNERSHIP ACT, 1890.
Part I. agent of every other in every matter connected with the
Sect. 5. partnership business, or which he represents as partnership
business, and not being in its nature beyond the scope of
the partnership." 1
Except where The exception in the event of the partner having no
he has neither au thority, and also not appearing to the other party to
real authority, have it (or even being known not to have it, in which
case no difficulty can be felt), is not established by any
direct decision. But it was said in a modern case by
Cleasby, B., that partnership does not always, and
especially does not in these circumstances, imply mutual
agency.
"In the common case of a partnership, where by the
terms of the partnership all the capital is supplied by A.,
and the business is to be carried on by B. and C, in their
own names, it being a stipulation in the contract that A.
shall not appear in the business or interfere in its manage-
ment ; that he shall neither buy nor sell, nor draw nor
accept bills ; no one would say that as among themselves
there was any agency of each one for the others. If,
indeed, a mere dormant partner were known to be a
partner, and the limitation of his authority were not
known, he might be able to draw bills and give orders for
goods which would bind his co-partners, but in the ordinary
case this would not be so, and he would not in the slightest
degree be in the position of an agent for them." 2
What kind ot The acts of a partner done in the name of a firm will
acts in general , , . , , „
bind the firm. not bmcl tne nl " m merely because they are convenient, or
1 James, L.J., in Baud's Case (1870) L. K. 5 Ch. at p. 733.
2 Oleasby, R, in Holm, v. Hammond (1872) L. R. 7 Ex. at p. 233.
In a case not involving partnership, an undisclosed principal was
held liable lor acts done by his agent without either real or apparent
authority : Wattmu v. Feiuricl: [1893] 1 Q. B. 346, sed qu. See
Lindley, 134, nolo (<•) ; L. Q. R. ix. 111.
29
POWER OF PARTNER TO BIND THE FIRM.
prudent, or even necessary for the particular occasion. Part I.
The question is, what is necessary for the usual conduct Sect. 5.
of the partnership business ; that is the limit of each
partner's general authority : he is the general agent of the
firm, but he is no more. "A power to do what is usual
does not include a power to do what is unusual, however
urgent." 1
Whether a particular act is " done in carrying on a
business in the way in which it is usually carried on " is a
question to " be determined by the nature of the business,
and by the practice of persons engaged in it." l This must
once have been a question of fact in all cases, as it still
would be in a new case. But as to a certain number of
frequent and important transactions, there are well under-
stood usages extending to all trading partnerships, and now
constantly recognized by the Court ; these have become in
effect rules of law, and it seems best to give them as such,
and this we proceed to do. In other words, there are
many kinds of business in which it is so notoriously needful
or useful to issue negotiable instruments, borrow money,
and so following, in the ordinary course of affairs, that the
existence or validity of the usage is no longer a question
of fact. But there is no authoritative list or definition of
the kinds of business which are "trades " in this sense.
Thus it is hardly possible to frame a statement which shall
be quite satisfactory in form.
It seems however that, subject to the limitations which implied
will appear, every partner may bind the firm by any of the partner/in
following acts : trade as to
° certain trans-
a. He may sell any goods or personal chattels of the
firm.
1 Lindley, 135.
30 PARTNERSHIP ACT, 1890.
Part I. b. He may purchase on account of the firm any goods
Sect. 5. of a kind necessary for or usually employed in .the
business carried on by it.
c. He may receive payment of debts due to the firm,
and give receipts or releases for them.
d. He may engage servants for the partnership business.
And it seems that if the partnership is in trade, every
partner may also bind the firm by any of the following
acts:
e. He may accept, make, and issue bills and other
negotiable instruments in the name of the firm. 1
/. He may borrow money on the credit of the firm.
g. He may for that purpose pledge any goods or personal
chattels belonging to the firm.
h. He may [probably] for the like purpose make an
equitable mortgage by deposit of deeds or otherwise
of real estate or chattels real belonging to the firm.
The general powers of partners as agents of the firm are
summed up by Story in a passage which has been adopted
by the Judicial Committee of the Privy Council r —
" Every partner is in contemplation of law the general
and accredited agent of the partnership, or as it is some-
times expressed, each partner is propositus negotiis socictatis,
1 Cp. the Bills of Exchange Act, 1882, s. 23, and Chalmers' Digest
of the Law of Bills of Exchange, 5th eil., p. 65 sqq. Where the firm-
name is also the name of an individual member of the firm who does
not carry on any separate business, a bill of exchange, drawn,
accepted, or indorsed in that name is presumed to be a partnership
bill, and if the other partners are sued on it the burthen of proof is
on them to show that the name was signed as that of the individual
partner and not as that of the firm : Yorkshire Banking Co. v. Beatson
(1880) 5 V. P. Div. 109, 121, 49 L. J. C. P. 380.
2 Story on Agency, § 124; Bank of Australasia v. Breillat (1847)
<i Moo. P. O. at p. 193.
POWER OF PARTNER TO BIND THE FIRM. 31
and may consequently bind all the other partners by his Part I.
acts in all matters which are within the scope and objects Sect. 5.
of the partnership. Hence, if the partnership be of a
general commercial nature, he may pledge or sell the
partnership property ; he may buy goods on account of
the partnership ; he may borrow money, contract debts,
and pay debts on account of the partnership ; he may
draw, make, sign, indorse, accept, transfer, negotiate, and
procure to discounted promissory notes, bills of exchange,
cheques and other negotiable paper in the name and on
account of the partnership."
The particular transactions in which the power of a
partner to bind the firm has been called in question, and
either upheld or disallowed, are exhaustively considered
by Lord Lindley (Partnership, 140 — 157). A certain
number of the leading heads may here be selected by way
of illustration. The distinction between the powers of
partners in trading and non-trading firms is perhaps not
quite clear on the authorities ; and Story, as we have just
seen, did not venture on anything more definite than " a
general commercial nature " to explain what the difference
between a trading and a non-trading business was ; but it
is believed that the existing practice and understanding
are correctly represented by the statement in the text.
Authority to bind, the Firm implied.
The power of binding the firm by negotiable instruments Negotiable
is one of the most frequent and important.
In trading partnerships every partner has this power
unless specially restrained by agreement. 1 In the case of a
1 Lindley, 141 ; Bank of Australasia v. Breillat (1847) 6 Moo. P. C.
at p. 194; Ex parte Darlington, &c. Banking Company (1864) 4
1). J. S. at p. 585. Brokers and commission agents" are not traders
32 PAIITNEBHMIP ACT, 1890.
Part I. non-trading partnership those who seek to hold the firm
Sect. 5. bound must prove that such a course of dealing is necessary
Exception as or usual in the particular business. In the case, again, of
to directors of ... , . ,, ,i ,
numerous an association too numerous to act in the way mat an
associations, ordinary partnership does," 1 whose affairs are under the
exclusive management of a small number of its members —
in other words, an unincorporated company — the presump-
tion of authority does not exist either for this purpose or
in the other cases where partners have in general an
implied authority ; for the ordinary authority of a partner
is founded on the mutual confidence involved, in ordinary
cases, in the contract of partnership ; and this confidence
is excluded when the members of the association are
personally unknown to one another.
In such a case those who are mere shareholders have no
power at all to bind the rest, and the directors or managing
members have no more than has been conferred on them
expressly or by necessary implication in the constitution of
the particular society. 2 But since the Companies Acts this
rule is not likely to have much practical application.
It seems indeed a not untenable suggestion that the
fixing of the number of twenty by the Companies Act,
1862, as the superior limit of an ordinary partnership
must be taken as a legislative declaration that no smaller
number can be considered " too numerous to act in the
way that an ordinary partnership does." The general
aim and policy of the Act, it might be urged, was to leave
no middle term between an ordinary partnership and a
within the meaning of this rule : Yates v. Dalton (1858) 28 L. J.
Kx, 69.
1 3 I). M. (}. 477 (1854).
» Did-iiiMw v. Valpn (1829) 10 B. & C. 128, 34 E. E. 348;
Principle? of Contract, fith ed., 125.
POWER OF PARTNER TO BIND THE FIRM. 33
company regularly formed under the Act. In point of Part I.
fact, however, associations of seven or more persons who Sect. 5.
do not mean to act as partners in the ordinary sense will
almost always seek to be registered as limited companies ;
and the question here suggested is perhaps merely curious.
Every partner in a trading firm has an implied authority Borrowing
to borrow money for the purposes of the business on th e mo " ey -
credit of the firm. 1 The directors of a numerous associa-
tion, according to the rule above explained, have no such
authority beyond what may have been specially committed
to them.-
Every partner has implied authority to dispose, either by Sale and
way of sale or (where he has power to borrow on the credit partnership
of the firm) by way of pledge, of any part of the goods or P r °perty.
personal property belonging to the partnership, 3 unless it
is known to the lender or purchaser that it is the intention
of the partner offering to dispose of partnership property
to apply the proceeds to his own use instead of accounting
for them to the firm. 4
A partner having power to borrow on the credit of the
firm may probably give a valid equitable security, by
deposit of deeds or otherwise, over any real estate of the
partnership. 5
But a legal conveyance, whether by way of mortgage or
otherwise, of real estate or chattels real of the firm, cannot
be given except by all the partners, or with their express
authority given by deed. 5
A partner may buy on the credit of the firm any goods Purchase.
1 Bank of Australasia v. Breillat (1847) 6 Moo. P. C. 152, 194.
2 Burmester v. Norris (1851) 6 Ex. 796, 21 L. J. Ex. 43.
3 Lindley, 156.
4 Ex parte Bonbonus (1803) 8 Ves. 540.
5 Lindley, 149, 152.
P. I)
34
PARTNERSHIP ACT, 1890.
Part I.
Sect. 6.
Employment
of solicitor
to defend
actions.
Payment to
i. nd release by
one partner.
Servants.
Deeds.
of a kind used in its business, and the firm will be bound,
notwithstanding any subsequent misapplication of them
by that partner. 1 This power extends to non-trading
partnerships. 3
The managing partner of a business firm has implied
authority to employ a solicitor to defend an action brought
against the firm for the price of goods supplied for its
business ; and the solicitor may enter appearance in the
name of each of the other partners, and is not bound to
inform them of the progress of the action. 3
Payment to one partner is a good payment to the firm, 4,
and by parity of reason a release by one partner binds the
firm, " because, as a debtor may lawfully pay his debt to
one of them, he ought also to be able to obtain a discharge
upon payment." 6
" One partner has implied authority to hire servants to
perform the business of the partnership," and probably also
to discharge them if the other partners do not object. 6
Authority to bind the Firm not implied.
One partner cannot bind the others by deed without
express authority (which must itself be under seal), 7 and
where the partnership articles are under seal, the fact of
their being so does not of itself confer any authority for
this purpose. 8
1 Bond v. Oihsm (1808) 1 Camp. 185, 10 R. R. 665.
2 Lindley, 154.
:1 Tomlinson v. Itroadsmith [1896] 1 Q. B. 386, 65 L. J Q B 308
C. A.
4 Lindley, 147.
' Best, C.J., in Skad v. Salt (18-25) 3 Bing. at p. 103, 28 R R 603
604.
6 Lindley, 157.
' Sieiylitz v. Ktftjinton (1815) Holt N. P. 141, 17 R. R, 622.
11 Harrison v. Jackson (1797) 7 T. R. 207, 4 R. R. 422.
POWER OF PARTNER TO BIND THE FIRM. 35
One partner cannot bind the others by giving a guaranty Part 1.
in the name of the firm, even if the act is in itself a reason- Sect. 5.
able and convenient one for effecting the purposes of the Guaranties.
partnership business, unless such is the usage of that
particular firm, or the general usage of other firms engaged
in the like business •} in other words, there is no general
implied authority for one partner to bind the firm by
guaranty, but agreement may confer such authority as to
a particular firm, or custom as to all firms engaged in a
particular business. In the latter case, however, the force
of the custom really depends on a presumed agreement
among the partners that the business shall be conducted
in the usual and customary manner.
A partner cannot accept shares in a company, even fully Satisfaction.
paid up, in satisfaction of a debt due to the firm. 3
It is not competent to one member of a partnership to Submission to
bind the firm by a submission to arbitration. 3
6. An act or instrument relating to the Partners
. . boimrt by acts
business ot the firm and done or executed in on behalf of
the firm-name, or in any other manner showing
an intention to bind the firm, by any person
thereto authorised, whether a partner or not, is
binding on the firm and all the partners.
Provided that this section shall not affect any
general rule of law relating to the execution of
deeds or negotiable instruments.
7. Where one partner pledges the credit of Partner using
credit of firm
the firm tor a purpose apparently not connected for private
purposes.
1 Brettel v. Williams (1849) 4 Ex. 623, 19 L. J. Ex. 121.
2 Niemann v. Niemann (1889) 43 Ch. Div. 198, 59 L. J. Ch. 220.
3 Stead v. Salt (1825) 3 Bing. 101, 28 B. B. 602 ; Adams v.
Bankart (1835) 1 C. M. & E. 681, 40 B. B. 670.
D 2
36 PARTNERSHIP ACT, IHm.
Part i. w ith the firm's ordinary course of business, the
sect. 7. £ rm j g no t bound, unless he is in fact specially
authorised by the other partners ; but this
section does not affect any personal liability
incurred by an individual partner.
Sect. 6 is too plain to need comment. The proviso
shows, perhaps with abundant caution, that the enacting
part does not dispense persons, merely because they happen
to be acting as partners or agents of a firm, from executing
formal instruments with the forms required by law.
Sect. 7 sums up the effect of long-accepted authorities,
and seems purposely to leave an unsettled point where
it was.
The passage already partly cited from Story (p. 30,
above) continues as follows : —
" The restrictions of this implied authority of partners
to bind the partnership are apparent from what has been
already stated. Each partner is an agent only in and for
the business of the firm ; and therefore his acts beyond
that business will not bind the firm. Xeither will his acts
done in violation of his duty to the firm bind it when the
other party to the transaction is cognizant of or co-operates
in such breach of duty." l
Persons who "have notice or reason to believe that the
thing done in the partnership name is done for the private
purposes or on the separate account of the partner doin"-
it," 3 cannot say that they were misled by his apparent
general authority. For his authority presumably exists
1 Story on Agency, § 125 ; Haul- of Auxtmlaria v. Breillat (1847)
(> Moo. P. 0. at p. 194.
- Ex ytnic Ihirlimjlon, dr. lUiuldng -Co. (1864) 4 D. J. S at
p. 585.
USIXG CREDIT OF FIRM FOR PRIVATE PURPOSES. 37
for the benefit and for the purposes of the firm, not for Part I.
those of its individual members. The commonest case, Sect. 7.
indeed the only case at all common, to which this principle
has to be applied, is that of one partner giving negotiable
instruments or other security in the name of the firm to
raise money (to the knowledge of the person advancing
it) for his private purposes or for the satisfaction of his
private debt. 1
" The unexplained fact that a partnership security has
been received from one of the partners in discharge of a
separate claim against himself is a badge of fraud, or of
such palpable negligence as amounts to fraud, which it is
incumbent on the party who so took the security to remove,
by showing either that the partner from whom he received
it acted under the authority of the rest, or at least that he
himself had reason to believe so." 3
" If a person lends money to a partner for purposes for
which he has no authority to borrow it on behalf of the
partnership, the lender having notice of that want of
authority cannot sue the firm." 3
" When a separate creditor of one partner knows he has
received money out of partnership funds, he must know at
the same time that the partner so paying him is exceeding
the authority implied in the partnership — that be is going
beyond the scope of his agency ; and express authority
1 See the cases referred to in the next note, and Heilbut v. Nevill
(1869-70) L. R. 4 C. P. 354, in Ex. Ch. 5 C. P. 478.
2 Smith, Merc. Law, 43 (9lh ed.), adopted by Keating and -Byles,
JJ., in Levieson v. Lane (1862) 13 C. JB. N. S. 278 ; 32 L. J. C. P.
10 ; by Lord Westbury, in Ex parte Darlington, dec. Banking Co.
(1864) 4 D. J. S. at p. 585 ; and by Coekburn, C.J. (subject to a
doubt as to the last words, see next page), in Kendal v. Wood (1871)
(Ex. Ch.) L. R. 6 Ex. at p. 248 ; 39 L. J. Ex. 167.
3 Bank of Australasia v. Breillat (1847) 6 Moo. P. C. at p. 196.
38
PARTNERSHIP ACT, 1890.
Part I.
Sect. 1.
Whether the
creditor may
be entitled as
against the
firm by
reasonable
belief in the
partner's
authority.
Instances of
the general
rule.
therefore is necessary from the other partner to warrant
that payment." 1
It is doubtful whether a separate creditor thus taking
partnership securities or funds from one partner is justified
even by having reasonable cause to believe in the existence
of a special authority ; the opinion has been expressed by
Cockburn, C.J., that he deals with him altogether at his
own peril. 3 But it may happen that the other partner
whom the separate creditor seeks to bind has so conducted
himself as to give reasonable ground for supposing there
is authority ; and where he has done so, he may be per-
sonally bound on the general principle of estoppel. The
rule is stated with this qualification or warning by Black-
burn, J., and Montague Smith, J. 3 And this case appears
to be contemplated by the final clause of the section, which,
however, it will be observed, does not positively impose or
declare any liability.
Another special application of the rule, declared by
sect. 7, was made in a case where two out of three part-
ners gave an acceptance in the name of the firm for a debt
incurred before the third had entered the partnership.
This was held not to bind the new partner, for it was in
effect the same thing as an attempt by a single partner to
pledge the joint fund for his individual debts.*
Again, if a customer of a trading firm stipulates with
one of the partners for a special advantage in the conduct
of their business with him, for a consideration which is
good as between himself and that partner, but of no value
1 Montague Smith
p. 253.
2 L. R. G Ex. 248, 3!) L. J. E:
3 L. 11. (i Ex. at pp. 251, 253.
■' Mimff v. llV/fa (1800) 1 East, 48, 5 R. R. 509 ; see per Le
Rlanc, J.
in Knidal v. Wood (1871) L. R. 6 Ex. at
167.
LIABILITY OF PARTNERS. 39
to the firm, the firm is not bound by this agreement, and Part 1.
incurs no obligation in respect of any business done in Sect. 7.
pursuance of it. 1
The same principle applies to the rights of persons
taking negotiable instruments indorsed in the name of the
firm. Where a partner authorized to indorse bills in the
partnership name and for partnership purposes indorses a
bill in the name of the firm for his own private purposes,
a holder who takes the bill, not knowing the indorsement
to be for a purpose foreign to the partnership, can still
recover against the other partners, notwithstanding the
unauthorized character of the indorsement as between the
partners ; 3 but if he knows that the indorsement is in fact
not for a partnership purpose he cannot recover. 3
8. If it has been agreed between the part- Effect of
ners that any restriction shall be placed on the fumwiii not
power of any one or more of them to bind the acts of" y
firm, no act done in contravention of the agree- P artner '
ment is binding on the firm with respect to
persons having notice of the agreement.
It is clear law that if partners agree between themselves Restrictive
A 2 r 66H1 6 n fc
that the apparent authority of one or more of them shall inoperative if
be restricted, such an agreement is inoperative against notnotl e •
persons having no notice of it.
" Where two or more persons are engaged as partners in
an ordinary trade, each of them has an implied authority
from the others to bind all by contracts entered into
according to the usual course of business in that trade. . . .
1 Bignuld v. Waterhouse (1813) 1 M. & S. 255.
2 Lewis v. Reilly (1841) 1 Q. B. 349.
3 Garland v. Jaromb (1873) (Ex. Oh.) L. E. 8 Ex. 216.
notice.
40 1'A11TNEHHHII J 'ACT, 1890.
Part I. Partners may stipulate among themselves that some one
Sect. 8. of them only shall enter into particular contracts, or that
as to certain of their contracts none shall be liable except
those by whom they arc actually made; but with such
private arrangements third persons dealing with the firm
without notice have no concern." 1
Effect of Further, there are dicta to the effect that a creditor who
deals with a partner as agent of the firm, having notice of
a restrictive stipulation among the partners themselves,
cannot hold the firm bound; 3 and this view seems to be
implied in the language of the present section, which copies
almost word for word a similar provision of the Indian
Contract Act (s. 251, Exception), namely: —
"If it has been agreed between the partners that any
restriction shall be placed upon the power of any one of
them, no act done in contravention of such agreement
shall bind the firm with respect to persons having notice
of such agreement."
If such is the effect, it is contrary to the opinion of
Lord Lindley, who points out that an agreement between
the partners that certain things shall not be done is
quite consistent with an intention that if they are done
the firm shall nevertheless be answerable. All that the
agreement necessarily means is that the transgressing
partner shall indemnify the firm, not that the firm shall
not be liable. There should be not merely a restriction of
authority as between the partners, but a distinct warning
to third persons dealing with the firm that if the forbidden
acts are done tbc firm will not answer for them. If a
partner tells a third person that he has ceased to be a
1 Lord Cranwoitli, in Cox, v. Hirkman (1860) 8 H. L. C. at p. 304.
'- Lord Cidlwaij v. Malhew (1808) 10 East, 264, 10 R. R. 289 ;
Alderson v. Pope (1809) 1 Camp. 404, «.
LIABILITY OF PARTNER*. 41
partner, but his name is to continue in the firm for a Part I.
•certain time, this is not a disclaimer of responsibility, but Sect. 8.
means that he will be responsible for the debts of the firm
■contracted during the specified time ■} and the cases seem
■closely parallel. The undoubted proposition that no agree-
ment among partners, whether known or not to third
persons, can avail, to limit tbe amount of their liability
for the debts of the firm, is also to some extent analogous. 3
Perhaps it may be found possible to construe the Act in a
manner consistent with this.
9. Every partner in a firm is liable jointly Liability of
with the other partners, and in Scotland severally
also, for all debts and obligations of the firm
incurred while he is a partner ; and after his
death his estate is also severally liable in a due
course of administration for such debts and
obligations, so far as they remain unsatisfied,
but subject in England or Ireland to the prior
payment of his separate debts. 3
The individual partner's liability for the dealings of the
■firm, whether he has himself taken an active part in them
•or not, is of the same nature as the liability of a principal
for the acts of his agent, and is often treated as a species
•of it. 4 "Each individual partner constitutes the others
his agents for the purpose of entering into all contracts
for him within the scope of the partnership concern, and
1 Brown v. Leonard (1816) 2 Chitty, 120, 23 R. R. 744.
2 Lindley, 186.
3 This section does not impose any new liability on the estates
•of deceased partners : Friend v. Young [1897] 2 Ch. 421, 66 L. J. Cii.
737.
4 See Cox v. Hiclcman (I860) 8 H. L. C. at pp. 304, 312.
42 PARTNERSHIP ACT, 1S90.
Part I. consequently is liable to the performance of all such con-
Sect. 9. tracts in the same manner as if entered into personally
by himself." 1
The liability It used to be stated that by the English rule of equity
not joint and J b .
several. partnership debts are joint and several ; but it was decided
by the House of Lords in Kendall v. Hamilton 3 that they
are joint only, except as to the estate of a deceased partner. 3
The facts of that case were in substance these : A. and B.,
ostensibly trading in partnership, borrowed money of C,
for which C. sued them and obtained judgment, but the
judgment was not satisfied. Afterwards C. discovered
that D., a solvent person, had been an undisclosed partner
with A. and B. at the time of the loan as to the adventure
in respect of which it was contracted. The law being
settled that a judgment recovered against some of divers
joint contractors is, even without satisfaction, a bar to an
action against another of them alone, C.'s action was
maintainable against D. only if D.'s liability for the lean
was several as well as joint. It was held that there was
no real authority for the supposed peculiarity of partner-
ship debts as regards living partners; that the several
liability of a deceased partner's estate was not an effect of
the supposed rule, but a special and somewhat anomalous
favour to creditors ; and that in this case the debt was not
joint and several, and C.'s action was barred.
In the case of a deceased partner's estate it does not
matter in what order the partnership creditor pursues his
concurrent remedies, provided the two following conditions
are substantially satisfied : first, he must not compete with
1 Per Tiuckl, C.J., in Fox v. Cliftou (1S30) 6 Bins, at p 792 31
K. E, 544. '
" 4 App. On. 504 (1879).
As to the importance of this exception, cp. Liudley, 204.
LIABILITY OF PARTNERS. 43
the deceased partner's separate creditors ; secondly, the Part I.
surviving partner must be before the Court. 1 Sect. 9.
The rule in Kendall v. Hamilton does not affect the
position of a surety for a partner's debt, for he does not
merely stand in the creditor's place us against the principal
debtor, but has further distinct rights. 3
And the rule of course does not affect such liabilities of
partners as are on the special facts both joint and several.
For example, where partners have joined in a breach of
trust there are several causes of action as well as a joint
one, and a judgment against the partners jointly does not
of itself bar subsequent proceedings against their separate
estates, 3 nor does a judgment recovered against one partner
discharge his co-partners. 4
Judgment recovered against one partner, sued in the
firm-name, on bills given in the firm-name for the price of
goods sold, is not of itself, without satisfaction, a bar to a
subsequent action against the other partner for the price
of the goods. The causes of action are distinct, and there
is no warrant for extending the rule in Kendall v. Hamilton
to such a case. 5 The Act does not appear to affect the point.
The law of Scotland appears to be what the rule of
English equity was, before Kendall v. Hamilton, supposed
to be. So far as the result of that case is to establish a
difference between the laws of the two countries, for which
1 Re Hodgson, Beckett v. Ramsdale (1885) 31 Ch. Div. 177, 55 L. J.
Ch. 241.
- Badeleij v. Consolidated Bank (1886) 34 Ch. D. 536, 556. This
point was not dealt with on appeal (1888) 38 Ch. Div. 238, 57 L. J.
Ch. 468, as the C. A. held that there was no partnership at all.
3 Re Davison, Ex parte Chandler (1884) 13 Q. B. D. 50.
4 Blyth v. Fladgate [1891] 1 Ch. 337, 353, 60 L. J. Ch. 66.
5 Wegg-Prosser v. Evans [1895] 1 Q. B. 108, 64 L. J. Q. B. 1,
C. A., overruling Cambefort & Go. v. Chapman (1887) 19 Q. B. D. 229,
56 L. J. Q. B. 639.
44
PARTNERSHIP ACT, 1890.
Part I.
Sect. lu.
Liability of
the firm for
wrongs.
Misapplica-
tion of
money or
property
received for
or in custody
of the firm.
Liability for
wrongs joint
and several.
there seems to be no rational ground in any difference of
mercantile usage, it is perhaps to be regretted.
10. Where, by any wrongful act or omission
of any partner acting in the ordinary course of
the business of the firm, or with the authority
of his co-partners, loss or injury is caused to
any person not being a partner in the firm, or
any penalty is incurred, the firm is liable there-
for to the same extent as the partner so acting
or omitting to act.
11. In the following cases ; namely —
(«.) Where one partner acting within the
scope of his apparent authority receives the
money or property of a third person and
misapplies it j 1 and
(b.) Where a firm in the course of its business
receives money or property of a third
person, and the money or property so
received is misapplied by one or more of
the partners while it is in the custody of
the firm ; 1
the firm is liable to make good the loss.
12. Every partner is liable jointly with his
co-partners and also severally 2 for everything
1 Note the different wording of these clauses. Under clause (o)
the receipt and misapplication of the money, &c, must be by the
same partner. Under clause (6), the firm, having once become
responsible, is liable for misapplication by any of its members.
See Bin Ir v. BnmU'ij (1847) -2 Ph. '354; St. Aubyn v. Smart (1868)
L. It. 3 Oh. t>4li ; and Plumerx. Gregory (1874) L. E. 18 Eq. '621, 627.
" Planter v. Gregory, last note.
LIABILITY OF PARTNERS FOR WRONGS. 45
for which the firm while he is a partner therein Part i.
becomes liable under either of the two last Sect ' 12 -
preceding sections.
Illustrations.
1. A., B. and C. are partners in a bank, C. taking no active
part in the business. D., a customer of the bank, deposits
securities with the firm for safe custody, and these securities
are sold by A. and B. without D.'s authority. The value of
the securities is a partnership debt for which the firm is liable
to D. ; and 0. or his estate is liable whether he knew of the
sale or not. 1
2. A. and B. are solicitors in partnership. C, a client of
the firm, hands a sum of money to A. to be invested on a
specific security. A. never invests it, but applies it to his own
use. B. receives no part of the money, and knows nothing of
the transaction. B. is liable to make good the loss, since
receiving money to be invested on specified securities is part
of the ordinary business of solicitors. 3
3. If, the other facts being as in the last illustration, Chad
given the money to A. with general directions to invest it
for him, B. would not be liable, since it is no part of the
ordinary business of solicitors to receive money to be invested
at their discretion. 8
4. J. and W. are in partnership as solicitors. P. pays
£1,300 to J. and W. to be invested on a mortgage of specified
real estate, and they jointly acknowledge the receipt of it for
that purpose. Afterwards P. hauls over £1,700 to W. on his
1 Devaynes v. Noble, Clayton's Case (1816) 1 Mer. at pp. 572, 579,
15 B, B. 161.
2 Blair v. Bromley (1847) 2 Ph. 354. Cases of this kind do not
depend on the law relating to trusts, and are therefore not within
s. 8 of the Trustee Act, 1888 (as to the Statute of Limitations). Qn.
whether, supposing that section applicable, they would not be
within the exceptions : Moore v. Knight [1891] 1 Ch. 547, 60 L. J.
Ch. 271.
" Harman v. Johnson (1853) 2 E. & B. 61, 22 L. J. Q. B. 297.
46
Sect. 12.
PARTNERSHIP ACT, 1890.
Part I. representation that it will be invested on a mortgage of some
" real estate of F., another client of the firm, such estate not
being specifically described. J. dies, and afterwards both
these sums are fraudulently applied to his owu use by W.
W. dies, having paid interest to' P. on the two sums till within
a short time before his death, and his estate is insolvent. J.'s
estate is liable to make good to P. the £1,300, with interest
from the date when interest was last paid by W., but not
the £1,700.!
.">. A. and B., solicitors in partnership, have by the direction
of C, a client, invested money for him on a mortgage, and
have from time to time received the interest for him. A.
receives the principal money without directions from C, and
without the knowledge of B., and misapplies it. B. is not
liable, as it was no part of the firm's business to receive the
principal money ; but if the money when repaid had been
passed through the account of the firm, B. would probably
be liable. 3
G. A., one of the partners in a banking firm, advises B., a
customer, to sell certain securities of B.'s which are in the
custody of the bank, and to invest the proceeds in another
security to be provided by A. B. sells out by the agency of
the bank in the usual way, and gives A. a cheque for the
money, which he receives and misapplies without the know-
ledge of the other partners. The firm is not liable to make
good the loss to B., as it is not part of the ordinary business
of bankers to receive money generally for investment. 3
7. A customer of a banking firm buys stock through the
agency of the firm, which is transferred to A., one of the
1 Plumer v. Gregory (1874) L. R. 18 Eq. 621.
" Situs v. Brutton (1850) 5 Ex. 802, -20 L. J. Exeli. 41, as corrected
by Lord Lindley's criticism, Lindley, 173, ep. Cleather v. Twisden
(1883) 28 Ch. Div. 340, 54 L. J. Ch. 408 ; Cooper v. Prichard (1883)
11 Q, B. Div. 351, 52 L. J. Q. B. 520; Rhodes \. Monies [1895]
1 Ob. 236, 64 L. J. Ch. 122, C. A., where the securities mis-
appropriated by one partner were of a class habitually held by
the firm for their clients, and the firm was therefore liable.
' 1 liixhop v. Countess of Jersey (1854) 2 Drew. 143.
LIABILITY OF PARTNERS FOR WRONGS. 47
partners, in pursuance of an arrangement between the partners, Part I.
and with, the customer's knowledge and assent, but not at his sect. 12.
request. A. sells out this stock without authority, and the
proceeds are received by the firm. The firm is liable to make
good the loss. 1
8. A customer of a banking firm deposits with the firm a
box containing securities. He afterwards authorizes one of
the partners to take out some of these and replace them by
certain others. That partner not only makes the changes he
is authorized to make in the contents of the box, but makes
other changes without authority, and converts the customer's
securities to his own use. The firm is not liable to make good
the loss, as the separate authority given to one partner by the
customer shows that he elected to deal with that partner alone
and not as agent of the firm. 2
9. A., one of the partners in a bank under the firm of M.
and Co., forges a power of attorney from B., a customer of the
bank, to himself and the other partners, and thereby procures
a transfer of stock standing in B.'s name at the Bank of
England. The proceeds of the stock are credited to M. and
Co. in their pass-book with another bank, but there is no
entry of the transaction in M. and Co.'s own books. The
other partners in the firm of M. and Co. are liable to B., because
it is within the scope of the firm's business to sell stock for its
customers, and to receive the proceeds of the sale, and the sale
took place and the money was received in the usual way [and
because they might by the use of ordinary diligence have known
of the payment and from what source it came]. 3
1 Devaynes v. Noble, Baring's Case (1816) 1 Mer. at pp. 611, 614, 15
R. R. 169.
2 Ex parte Eyre (1842) 1 Ph. 227 ; cp. the remark of James, V.-C,
L. R. 7 Eq. 516 (1869).
3 Marsh v. Keating (1834) 2 CI. & F. 250, 289, 37 R. R. 75, 106 ;
cp. Lord Lindley's comments, Lindley, 171, and 176, note (p).
If his comment is right, as it clearly is, one can hardly see
what the knowledge or means of knowledge of the partners had
to do with it ; they were liable because money representing their
customer's property had come, in an. apparently regular course,
48 PARTNERSHIP ACT, 1890.
Part I, 10. W. and J. are solicitors in partnership. A., B. and C,
Sect. 12. clients of the firm, have left moneys representing a fund in
which they are interested in the hands of the firm for. invest-
ment. After some delay a mortgage made to W. alone is,
with the consent of A., B. and C, appropriated as a security
for this fund. TV. realizes the security, and misapplies the
money without the knowledge of J. The firm is not liable, as
A., B. and C. dealt with W. not as a solicitor but as a trustee,
and the breach of duty did not happen while the money was
in the hands of the firm. 1 But if there were facts showing
that A., B. and C. dealt with W. as a member of the firm, and
the matter of the investment was treated as the business of the
firm, the firm would be liable. 2
Ground of The general principle on which the firm is held to be
liability. .
liable in cases of this class may be expressed in more than
one form. It may be put on the ground " that the firm
has in the ordinary course of its business obtained posses-
sion of the property of other people, and has then parted
with it without their authority;" 3 or the analogy to other
cases where the act of one partner binds the firm may be
brought out by saying that the firm is to make compensation
though in truth by wrong, into the custody of the firm ; but the
point is treated as material in the opinion of the judges. The trutli
is that the rule as above given, by which the ordinary course of
business is the primary test of the firm's liability, was developed
only by later decisions.
1 Coonurv. Bromley (1852) 5 De G. & Sin. 5.32 ; and see a fuller
account of the case in Lindley, 174, 175.
" Gkather v. TwMm (1883) 28 Ch. Div. 340, 54 L. J. Ch. 408,
where the 0. A., agreeing with the Court below as to the law, held
that, the facts did not come up to this. ('p. Rhfth v. Fhdqnte, [J 8911
1 Ch. 337, 60 L. J. Ch. 66 ; Rhodes v. M,wl c * [18.95] 1 Ch. 236,64
L. J. Ch. 122, C. A. At all events, it is not within the scope of a
solicitor's implied authority in partnership matters to impose liability
on his partner by making himself a constructive trustee : Mara v
Jliwme [189(1] 1 Ch. 199, 65 L. J. Ch. 225, C. A.
3 Lindley, 170.
LIABILITY OF PARTNERS FOR WRONGS. 49
for the wrong of the defaulting partner, because the other Part 1.
members " held him out to the world as a person for whom sect. 12.
they were responsible." x
The rules laid down in sects. 10 and 11 arc really Oeneraltest
derived from the wider rule to the same effect which is o"a P gency Ple
one of the most familiar and important parts of the law
of agency. The question is always whether the wrong-
doer was acting as the agent of the firm and within the
apparent scope of his agency. If the wrong is extraneous
to the course of the partnership business, the other partners
are no more liable than any other principal would be for
the unauthorized act of his agent in a like case. The
proposition that a principal is not liable for the wilful
trespass or wrong of his agent is for most purposes suffi-
ciently correct ; but a more exact statement of the rule
would be that the principal is not liable if the agent goes
out of his way to commit a wrong, whether with a wrong-
ful intention or not. On the one hand, the principal may
be liable for a manifest and wilful wrong if committed by
the agent in the course of his employment, and for the
purpose of serving the principal's interest in the matter in
hand ; 3 he is also liable for trespass committed by the
agent under a mistake of fact, such that, if the facts had
been as the agent supposed, the act done would have been
not only lawful in itself, but within the scope of his lawful
authority : 3 on the other hand, he is not liable for acts
outside the agent's employment, though done in good
faith and with a view to serve the principal's interest. 4
1 Per James, V.-C, in Earl of Dundonald v. Maslerman (1869)
L. R. 7 Eq. at p. 517, 58 L. J. Ch. 350.
2 Limpus v. General Omnibus Go. (Ei. Ch. 1862) 1 H. & C. 526.
3 Baijley v. Manchester, &c. Railway Go. (Ex. Ch. 1873) L. E. 8
C. P. 148, 42 L. J. 0. P. 78.
4 Poulton v. L. & S. W. R. Co. (1867) L. R. 2 Q. B. 534, 36 L. J.
P. B
50 PARTNERSHIP ACT, 1890.
Part I. It is by no means easy to assign the true ground of an
Sect. 12. employer's liability for his servant's unauthorized or even
forbidden acts and defaults. Perhaps the master's duty
is best understood if regarded not as arising from the
relation of principal and agent, but as a general duty to
see that his business is conducted with reasonable care for
the safety of other people, analogous to the duty imposed
on owners of real property to keep it in a safe condition
as regards persons lawfully passing on the highway, or
coming on the property itself by the owner's invitation.
This view, which I have endeavoured to develop more
fully in my work on the law of Torts, has more distinct
countenance from both English and American authority
than might be expected. But the subject is too large to
dwell upon here.
Special oases Cases to which it has been sought, with or without
tion of client's success, to apply the principle stated in sect. 11 have
partner 7 °" e g enera Uy arisen in the following manner. Some client of
a firm of solicitors or bankers, reposing special confidence
in one member of the firm, has intrusted him with money
for investment : this has sometimes appeared in a regular
course in the accounts of the firm, sometimes not. Then
the money has been misapplied by the particular partner
in question. When it is sought to charge the firm with
making it good, it becomes important to determine whether
the original transaction with the defaulting partner was in
fact a partnership transaction, and if it was so, whether the
duty of the firm was not determined before the default.
The illustrations above given will show better than any
Q. B. 204 ; Allen v. L. <('• S. W. R. Co. (1870) L. R. 6 Q. B. 65, 40
L. J. Q. B. 55 ; Bolingbroke v. Sirindmi Local Board (1874) L. B. 9
C. P. 575, 43 L. J. C. P. 575.
LIABILITY OF PARTNERS FOR WRONGS. 51
farther comments of a general kind how these questions Part I.
are dealt with in practice. Sect. 12.
In one recent case, where the facts were of a special and
complicated kind, the wrong consisted in a negligent
investment of trust funds on improper security, made
under the professional advice of one member of a firm of
solicitors while the trust fund was in the hands of the firm.
The result was that his partners were deemed to have
notice of the improper character of the investment, and
were answerable for the breach of trust as well as
himself. 1
In another very peculiar case one solicitor used the
name of another firm without authority to get money out
of Court, which he proceeded to misapply. He then told
a member of the firm he had used their name, but led him
to suppose that it was a merely formal matter. In that
belief that member of the innocent firm accepted a relatively
small sum for costs, of which part was returned for out
of pocket expenses, and the rest went to the firm's credit,
the other partner not knowing the circumstances of the
payment. The firm was held liable only for this last-
mentioned residue, and the partner who acted only for the
amount paid to him. 3
It will be observed that in some of these cases the
action of the Court may be referred to its summary
jurisdiction over solicitors as its own officers, subject to
this caution, that it will not hold the solicitor liable
beyond the loss actually occasioned by his neglect or
breach of duty. 3
1 Blyth v. Fladgate [1891] 1 Ch. 337, 60 L. J. Ch. 66.
2 Marsh v. Joseph [1897] 1 Ch. 213, 66 L. J. Cb. 128, C. A.
3 [1897] 1 Ch. at p. 245.
e2
52
PARTNERSHIP ACT, 1890.
Part I.
Sect. 13.
Improper
employment
of trust-pro-
perty for
partnership
purposes.
Liability of
partners for
breach of
trust by one
not really a
partnership
liability.
13. If a partner, being a trustee, improperly
employs trust-property in the business or on
the account of the partnership, no other partner
is liable for the trust-property to the persons
beneficially interested therein :
Provided as follows : —
(1.) This section shall not affect any liability
incurred by any partner by reason of his
having notice of a breach of trust ; 1 and
(2.) Nothing in this section shall prevent trust
money from being followed and recovered
from the firm if still in its possession or
under its control.
This section may be considered as inserted here for
convenience. It does not properly belong to the law
of partnership. For only such persons can be liable for
a breach of trust as are personally implicated in it by their
own knowledge or culpable ignorance, besides the active
defaulter or defaulters. Hence it could never be correctly
supposed that a firm as such is liable merely because a
breach of trust has been committed by one of its members,
or that the individual partners are liable as partners. They
are only joint wroug-doers to whom the fact of their being
in partnership has furnished an occasion of wrong-doing.
The case is not really analogous to that of money being
received in a usual course on the credit of the partnership
and misapplied : as may be seen by putting the stronger
case of all the partners robbing a customer in the shop,
or cheating him in some matter unconnected with the
business, and crediting the firm with the money taken
■o Blyth v. Fladyatc, note 1 , p. 51, above.
IMPROPER EMPLOYMENT OF TRUtiT PROPERTY. 53
from him. Here it is obvious that the relation of partner- Part I.
ship is not a material element in the resulting liability. Sect. 13.
Something will be said in another place, however, of
a special kind of claims against partners as trustees or
executors of a deceased partner which have often raised
difficult and complicated questions.
Compare the Indian Trusts Act, 1882, s. 67 : " If a
partner, being a trustee, wrongfully employs trust-property
in the business or on account of the partnership, no other
partner is liable therefor in his personal capacity to the
beneficiaries, unless he had notice of the breach of trust."
By the interpretation clause, s. 3, " a person is said to have
notice of a fact either when he actually knows that fact or
when, but for wilful abstention from inquiry or gross
negligence, he would have known it, or when information
of the fact is given to or obtained by his agent under the
circumstances mentioned in the Indian Contract Act, 1872,
s. 229 " {i.e., in the course of the business transacted by
him for the principal).
14. (1-) Every One Who by WOrds Spoken Persons liable
or written or by conduct represents himself, or out."
who knowingly suffers himself to be represented,
as a partner in a particular firm, is liable as a
partner to any one who has on the faith of any
such representation given credit to the firm,
whether the representation has or has not been
made or communicated to the person so giving
credit by or with the knowledge of the apparent
partner making the representation or suffering
it to be made. 1
1 Cp. I. C. A. 245, 246.
54 PARTNERSHIP ACT, 1890.
fart i. (2.) Provided that where after a partner's
sect. 14. death the partnership business is continued in
the old firm-name, the continued use of that
name or of the deceased partner's name as part
thereof shall not of itself make his executors or
administrators estate or effects liable for any
partnership debts contracted after his death.
This rule a " Where a man holds himself out as a partner, or allows
branch o£ . . ,
estoppel. others to do it, he is then properly estopped from denying
the character he has assumed, and upon the faith of
which creditors may be presumed to have acted. A man
so acting may be rightly held liable as a partner by
estoppel." 1 The rule is, in fact, nothing else than a
special application of the much wider principle of estoppel,
which is that if any man has induced another, whether by
assertion or by conduct, to believe in and to act upon the
existence of a particular state of facts, he cannot be heard,
as against that other, to deny the truth of those facts. 3 It
is therefore immaterial whether there is or is not in fact^ or
to the knowledge of the creditor, any sharing of profits.
And it makes no difference even if the creditor knows
of the existence of an agreement between the apparent
partners that the party lending his name to the firm shall
not have the rights or incur the liabilities of a partner.
For his name, if lent upon a private indemnity as between
the lender and borrower, is still lent for the very purpose
of obtaining credit for the firm on the faith of his being
1 Per Cur., Molliro, March <C- Co. v. Court of Wards (1872) L. R. 4
P. C. at p. 435.
2 For fuller and more exait statements, see Corr v. London and
North Western Railmnj Compuny (187:>) L. R. 10 C. P. at pp. 316,
317 ; Stephen's Digest of the Law of Evidence, Art. 102 ; Bigelovvon
the Law of Estoppel (Boston, Mass. 0th ed. 1890).
PERSONS LIABLE BY " HOLDING OUT." 55
responsible; and the duty of the other partners to indemnify Parti,
him, so far from being inconsistent with his liability to third Sect. 14.
persons, is founded on it and assumes it as unqualified. 1
To constitute "holding out" there must be a real What
lending of the party's credit to the partnership. The use "holding
of a man's name without his knowledge cannot make him out '
a partner by estoppel. 3 Also the use of his name must
have been made known to the person who seeks to make
him liable ; otherwise there is no duty towards that
person. 3 There may be a "holding out" without any
direct communication by words or conduct between the
parties. One who makes an assertion intending it to be
repeated and acted upon, or even under such circumstances
that it is likely to be repeated and acted upon by third
persons, will be liable to those who afterwards hear of it
and act upon it. " If the defendant informs A. B. tbat
he is a partner in a commercial establishment, and A. B.
informs the plaintiff, and the plaintiff believing the defen-
dant to be a member of the firm supplies goods to them,
the defendant is liable for the price." If the party is not
named, or even if his name is refused, but at the same
time such a description is given as sufficiently identifies
the person, the result is the same as if his name had been
given as a partner. 4
The rule as to "holding out " extends to administration Doctrine of
in bankruptcy. If two persons trade as partners, and out ° , applies
buy goods on their credit as partners, and afterwards both to administra-
J ° i tion m bank-
become bankrupt, then, whatever the nature of the real ruptcy.
agreement between themselves, the assets of the business
1 Lindley, 65, 66.
2 lb. 68 ; Fox v. Clifton (1830) 6 Bing. 776, 794, 31 R. R. 536, 546.
» lb. : Martyn v. Gray (1863) 14 0. B. N. S. 824.
* Per Williams, J., Martyn v. Gray (1863) 14 C. B. N. S. at p. 841.
5(5
PARTNERSHIP ACT, 1890.
Part I.
Sect. 14.
It does not
apply to bind
a deceased
partner's
estate.
Liability of
retired part-
ners.
Principle of
" holding
out " not ap-
plicable to
liability in
tort
must be administered as joint estate for the benefit of the
creditors of the supposed firm. 1
The doctrine of "holding out " does not extend to bind
the estate of a deceased partner, where, after his death, the
business of the firm is continued in the old name; and
whether creditors of the firm know of his death or not
is immaterial. " The executor of the deceased incurs
no liability by the continued use of the old name." 3
Sub-sect. 2 declares the settled law on this point.
A partner who has retired from the firm may be liable
on the principle of "holding out" for debts of the firm
contracted afterwards, if he has omitted to give notice of
his retirement to the creditors. But he cannot be thus
liable to a creditor of the firm who did not know him to
be a member while he was such in fact, and therefore
cannot be supposed to have dealt with the firm on the
faith of having his credit to look to. 3 This is the meaning
of the saying that " a dormant partner may retire from a
firm without giving notice to the world." 1
In one reported case 5 a retired partner was held liable
for damage done by a cart belonging to the firm, on which
his name still remained. But to make a man liable in tort
as an apparent partner involves confusion of principles.
1 Re Rowland and Craidshaw (1866) L. R. 1 Ck. 421 ; Ex parte
Hay man (1878) 8 Cli. Div. 11, 47 h. J. Bky. 54.
- Lindley, 74, 621.
3 Carter v. Ulialley (1830) ] B. & Ad. 11, 35 B. R. 199.
•" Heath v. Hansom (1832) 4 B. & Ail. 172, 177, 38 R. R. 237, 242,
per Patteson, J. On the subject of this and of the preceding
paragraph, see further Art. 53 below.
•' Stables v. Kb \j (1825) 1 C. & P. 614. For the true principle, see
Quarmau v. Burnett (1840) 6 M. & AY. at p. 508, where it is observed
that a representation by holding out " can only conclude the defen-
dants with respect to those who have altered their condition on the
faith of its being true.''
PE11S0NS LIABLE BY "HOLDING OUT." 57
Liability by " holding out " rests on the presumption that Part I.
■credit was given to the firm on the strength of the apparent Sect. 147"
partner's name. This has no application to causes of action
independent of contract : when, as in the case referred to,
a carriage is run into by a cart, there can be no question
■of giving credit to the man whose name is on the cart.
The fact that his name is there is some evidence that the
■driver was in fact his servant, 1 until otherwise explained ;
when explained, and if the explanation is believed, it is no
longer even that. It has now been declared in the Court
of Appeal that Stables v. Eley, as reported, is wrong. 3
15. An admission or representation made by Admissions
any partner concerning the partnership affairs, sentations of
and in the ordinary course of its business, is par uers '
evidence against the firm. 3
An admission made by a partner, though relevant against
the firm, is of course not conclusive ; + for an admission
is not conclusive against the person actually making it.
A definition of the term admission, and references to
-authorities on this subject will be found in Sir James
Stephen's Digest of the Law of Evidence, Art. 15. Repre-
sentations, however, may be conclusive by way of estoppel,
or under some of the rules of equity which are in truth
afeim i&o zhe legal doctrine of estoppel, and rest on the
fc&ELe principle.
Tie rule does not apply to a representation made by
•"..'-* 1 -irisisei a- to the extent of his own authority to bind
" > liodley, 75.
■-■iiJifc T. Bailey [1891] 2 Q. B. 403, 60 L. J. Q. B. 779.
«ViM» v. Wickham (1855) 2 K. & J. 478, 491.
: jW; -r. Salt (Ihio) 3 Bing. at p. 103, 28 R. B. 604
58
PARTNERSHIP ACT, 1890.
Part I.
Sect. 15.
Notice to
acting
partners to be
notice to the
firm.
Liabilities of
incoming
and outgoing
partners.
the firm. 1 The necessity of this qualification is obvious,
for otherwise one partner could bind the firm to anything
whatever by merely representing himself as authorized to
do so. The legislature seems to have thought it too-
obvious for express mention.
16. Notice to any partner who habitually
acts in the partnership business of any matter
relating to partnership affairs operates as notice
to the firm, except in the case of a fraud on
the firm committed by or with the consent of
that partner. 2
There does not seem, before the Act, to have been any
clear authority for confining the rule to acting partners.
But it would obviously be neither just nor convenient to
hold that notice to a dormant partner operated, without
more, as notice to the firm.
It is doubtful whether a firm is to be deemed to have
notice of facts known to a partner before he became a
member of the firm. 3 This doubt is not removed by
the Act.
17. — (1-) A person who is admitted as a
partner into an existing firm does not thereby
become liable to the creditors of the firm for
anything done before he became a partner. 4
1 Ex parte Atjace (1792) 2 Cox, 312, 2 R. H, 49.
2 Lindley, 141, 142; Jesse], M.S., in Williamson v. Barbour
(1877) 9 Cli. D. at p. 535 ; cp. Lacey v. Hill (1876) 4 Ch. Div-
at p. 549.
;1 Jessel, M.R., in Williamson v. Barbour, 9 Ch. D. at p. 535 :—
" It has not, so far as I know, been held that notice to a man who-
aftorwards becomes a partner is notice to the firm. It might be so-
held."
4 Op. 1. ('. A. 249.
LIABILITY OF INCOMING AND OUTGOING PARTNER*. 59
("2.) A partner who retires from a firm does Part i.
not thereby cease to be liable for partnership Sect - n -
debts or obligations incurred before his retire-
ment.
(3.) A retiring partner may be discharged
from any existing liabilities by an agreement
to that effect between himself and the members
of the firm as newly constituted and the credi-
tors, and this agreement may be either express
or inferred as a fact from the course of dealing
between the creditors and the .firm as newly
constituted. 1
Illustrations.
1. A., B. and C. are partners. D. is a creditor of the firm.
A. retires from the firm, and B. and C, either alone or together
with a new partner, E., take upon themselves the liabilities of
the old firm. This alone does not affect D.'s right to obtain
payment from A., B. and C, or A.'s liability to D.
2. A., P. and Q. are partners. A. is the managing partner
and P. and Q. are dormant partners. A. instructs X., a solici-
tor, to bring an action in the firm-name. While the action is
pending the partnership is dissolved. X. does not know that
P. and Q. are partners, and has no notice of the dissolution,
and no step is taken by P. or Q. to withdraw X.'s retainer.
P. and Q. are liable to X. for costs incurred in the action after
as well as before the dissolution. 3
3. A partnership firm, consisting of A., B. and C, enters
into a continuing contract with D., which is to run over a
period of three years. After one year A. retires from the firm,
taking a covenant from B. and C. to indemnify him against
all liabilities under the contract. D. knows of A.'s retirement.
; Lindley, 254, sqg.
- Court v. Berlin [1897] 2 Q. B. 396, 66 L. J. Q. B. 714, C. A.
60 PARTNERSHIP ACT, 1890.
Part I. A. remains liable to D. under the contract, and is bound by
Sect, 17~ everything duly done under it by B. and C. after his retirement
from the firm. 1
•J. A., B. and C. are bankers in partnership. A. dies, and
B. and C. continue the business. 1)., E. and F., customers of
(he bank at the time of A.'s death, continue to deal with the
bank in the usual way after they know of A.'s death. The
firm afterwards becomes insolvent. A.'s estate remains liable
to D., E. and F. for the balances due to them respectively at
the time of A.'s death, less any sums subsequently drawn out. 3
In the last case pur, one customer, D., discovers that
securities held by the bank for him have been sold without his
authority in A.'s lifetime. Here' A.'s estate is not discharged
from being liable to make good the loss, for the additional
reason that D. could not elect to discharge it from this
particular liability before he knew of the wrongful sale. 5
5. A. and B. are bankers in partnership. C. and D. are
admitted as new partners, of which notice is given by circular
to all the customers of the bank. A short time afterwards A.
dies. Two years later B. dies, and the business is still con-
tinued under the same firm. The bank gets into difficulties,
and at last stops payment. Depositors in the bank whose
deposits were prior to A.'s death, and who knew of his death,
and continued to receive interest on their deposits from the
new partners, and have proved in the bankruptcy of C. and D.
for the amount of their deposits, cannot now claim against
A.'s estate, for their conduct amounts to an acceptance of the
liability of the new partners alone. J
(i. A. and B. are bankers in partnership. A. dies. X., a
customer of the bank, to whom A.'s death is known, draws
Oakford v. Eurojhan and American Steam Shipping Company
(1803) 1 H. & M. 182, 191. Sue also »n>cv.JW«mi (1876) 1 Q. B. D.
536; Mouse v. llradford Paulimj Co. [1894] 2 Ch. 32 ; in H. L. [1894]
A. C. 580, (53 L. ,1. Oh. 890.
'- Herayues v. Xobh, Slm-h's Case (18105) 1 llw. 539, 509, 15 E. H.
155 ; Clayton'* Oust- (1810) 1 Mw. 57:2, 604, 15 K, K. 161, 163.
■' Clat/ton's Case (1816) 1 Mor. at p. 579.
* lliltwrmiijh v. ;y»/mt-*(lS76) 5 Ch. D. 255, 46 L. J. Ch. 4 6.
Sect. 17.
LIABILITY OF INCOMING AND OUTGOING PARTNERS. 61
out part of a sum left by him on deposit, and takes a fresh Part I.
deposit receipt for the residue signed in the firm-name by a
cashier, this being the usual course of business. This is not
an acceptance by X. of B.'s liability alone in exoneration of
A.'s estate. 1 Z., another customer, transfers money from n,
current to a deposit account, and takes a receipt signed by B.
for the firm. This is an acceptance of B.'s sole liability and
discharge of A.'s estate. 3
7. A. ami B. are partners. F. is a creditor of the firm.
A. and B. take C. into partnership. C. brings in no capital.
The assets and liabilities of the old firm are, by the consent
of all the partners, but without any express provision in the
new deed of partnership, transferred to and assumed by the
new firm. The accounts are continued in the old books as if
no change had taken place, and existing liabilities, including
a portion of F.'s debt, are paid indiscriminately out of the
blended assets of the old and the new firm. F. continues his
dealings with the new firm on the same footing as with the
old, knowing of the change and treating the partners in the
new firm as his debtors. The new firm of A., B. and C. is
liable to F. 3
8. A. and B. are partners. A. retires, and B. takes 0. into
partnership, continuing the old firm-name. A customer who
deals with the firm after this change, and without notice of it,
may sue at his election A. and B., or B. and C. ; but he cannot
sue A., B. and C. jointly, nor sue A. after suing B. and C. 1
To determine whether an incoming partner has become Test of lia-
liable to an existing creditor of the firm, two questions fi ^ ] ty ° new "
have to be considered : —
1st. Whether the new firm has assumed the liability to
pay the debt.
1 Re Head [1893] 3 Ch. 426, 63 L. J. Ch. 35.
2 Re Head (No. 2) [1894] 2 Ch. 236, 63 L. J. Ch. 549, C. A.
3 Rolfe v. Flower (1865) L. R 1 P. C. 27.
4 Scarf v. Jardine (1882) (H. L.) 7 App. Ca. 345, 51 L. J. Q. B.
612.
62 PARTNERSHIP ACT, 1890.
Part I. 2nd. Whether the creditor has agreed to accept the new
~~Seet. 17. firm as his debtors, and to discharge the old partnership
from its liability. 1
Novation. Novation is the technical name for the contract of substi-
tuted liability, which is, of course, not confined to cases of
partnership. As between the incoming partner and the
creditor, the consideration for the undertaking of the
liability is the change of the creditor's existing rights.
Mere agree- An agreement between the old partners and the incoming
partners can- partner that he shall be liable for existing debts will not of
novatiorf' 6 aS itself 8 iye tne creditors of the firm any right against him ;
for it is the rule of modern English law (though it was
formerly otherwise in England, and now is, to some extent,
in several American States) that not even the express
intention of the parties to a contract can enable a third
person for whose benefit it was made to enforce it. An
incoming partner is liable, however, for new debts arising
out of a continuing contract made by the firm before he
joined it ; as where the old firm had given a continuing
order for the supply of a particular kind of goods. -
There is in law nothing to prevent a firm from stipulating
with any creditor from the beginning that he shall look
only to the members of the firm for the time being : the
term novation, however, is not properly applicable to such
Bevoeation \Q A continuing guaranty or cautionary
of continuing ....
guaranty by obligation given either to a firm or to a third
change in .
firm. person in respect of the transactions of a firm is,
1 liolfe v. Flower (1865) L. B. 1 P. C. at p. 38.
■ Lindley, 216.
3 This is involved in Hort's Ciw and drains Case (1875) 1 Ch.
Div. 307 ; see per James, L.J., at p. 322, and ep. Lindley, 254,
note (a).
REVOCATION OF GUARANTY BY CHANGE IN FIRM. 63
in the absence of agreement to the contrary, Part i.
revoked as to future transactions by any change Sect - 18 -
in the constitution of the firm to which, or of
the firm in respect of the transactions of which,
the guaranty or obligation was given.
This section is a substantial re-enactment, much con-
densed and improved in expression, of provisions of the
Mercantile Law Amendment Act of 1856 for England and
Scotland respectively (see the repealing enactment, s. 48
below, and the Schedule). The present form is almost
word for word from I. C. A. 260.
An intention that the promise shall continue to be Evidence of
binding, notwithstanding a change in the members of the guaranty
firm, cannot be inferred from the mere fact that the tinue° 0n "
primary liability is an indefinitely continuing one ; as, for
example, where the guaranty is for the sums to become
due on a current account. 1 Such intention may appear
" by necessary implication from the nature of the firm "
where the members of the firm are numerous and frequently
changing, and credit is not given to them individually, as
in the case of an unincorporated insurance society. 3
Relations of Partners to one another.
19. The mutual rights and duties of partners, variation by
consent of
whether ascertained by agreement or defined terms of
T)3.rtn6rsh i d
by this Act, may be varied by the consent of
all the partners, and such consent may be either
express or inferred from a course of dealing. 3
1 Backhouse v. Hall (1865) 6 B. & S. 507, 520, 34 L. J. Q. B. 141.
2 See Metcalfv. Bruin (1810) 12 East, 400, 11 R. K. 432.
3 Cp. I. C. A. 252 ; Const v. Harris (1824) T. & R. 496, 517, 24
g4 PABTNKIISHIP ACT, 1890.
Part I.
SectTl9. Illustrations.
1. It is agreed between partners that no one of them shall
draw or accept bills in his own name without the concurrence
of the others. Afterwards they habitually permit one of them
to draw and accept bills in the name of the firm without such
concurrence. This course of dealing shows a common consent
to vary the terms of the original contract in that respect. 1
i. Articles of partnership provide that a valuation of the
partnership property shall be made on the annual account
day for the purpose of settling the partnership accounts. The
valuation is constantly made in a particular way for the space
of many years, and acted upon by all the partners for the time
being. The mode of valuation thus adopted cannot after this
course of dealing be disputed by any partner or his represen-
tatives, though no particular mode .of valuation is prescribed
by the partnership articles, or even if the mode adopted is
inconsistent with the terms of the articles. 2
3. It is the practice of a firm, when debts are discovered to
be bad, to debit them to the pro6t and loss account of the
current year, without regard to the year in which they may
It. R. 108, 126. " "With respect to a partnership agreement, it is to
be observed, that, all parties being competent to act as they please,
they may put an end to or vary it at any moment ; a partnership
agreement is therefore open to variation from clay to day, and the
terms of such variations may not only be evidenced by writing, btit
also by the conduct of the parties in relation to the agreement and to
their mode of conducting their business : when, therefore, there is a
variation and alteration of the terms of a partnership, it does not
follow that there Was not a binding agreement at first. Partners, if
they please, may, in the course of the partnership, daily come to a
new arrangement for the purpose of having some addition or altera-
tion in the terms on which they carry on business, provided those
additions or alterations be made with the unanimous concurrence of
all the partners": Lord Langdale, M.R., in Entjhiml v. Cutii mj (\S-i-i)
8 l'.eav. 129, 133.
1 Lord Eldon in Const v. Harris (]>24! T. & R at p. 523, 24 R. R.
131.
' Omrutnj v. Barclay (1864) 3 D. J. S. 320.
PARTNERSHIP PROPERTY. 65'
have been reckoned as assets. A partner dies, and after the Part I.
accounts have been made up for the last year of his interest in Seoti 19i
the firm, it is discovered that some of the supposed assets of
that year are bad. His executors are entitled to be paid the
amount appearing to stand to his credit on the last account day,
without any deduction for the subsequently discovered loss. 1
It, is an obvious corollary of the rule here set forth that Variations
persons claiming an interest in partnership property as t0 binding on
representatives or assignees of any partner who has assented P artner ' s
D J r representa-
expressly or tacitly to a variation of the original terms of tives.
partnership are bound by his assent, and have no ground
to complain of those terms having been departed from. 2
20. — (1-) All property and rights and inte- Partnership
rests in property originally brought into the pr ° per J '
partnership stock or acquired, whether by pur-
chase or otherwise, on account of the firm, or
for the purposes and in the course of the part-
nership business, are called in this Act partner-
ship property, and must be held and applied
by the partners exclusively for the purposes of
the partnership and in accordance with the
partnership agreement.
(2.) Provided tbat the legal estate or interest
in any land, 3 or in Scotland the title to and
interest in any heritable estate, which belongs
to the partnership, shall devolve according to
1 Ex parte Barber (1870) L. E. 5 Ch. 687.
2 Const v. Harris (1824) T. & R. at p. 524, 24 R. R 131.
3 By the Interpretation Act, 1889, s. 3, "land" includes "mes-
suages, tenements, and hereditaments, houses, and buildings of any
tenure."
P. F
66 PARTNERSHIP ACT, 1890.
Part i. the nature and tenure thereof, and the general
sect. 20. ru j eg f j aw thereto applicable, but in trust,
so far as necessary, for the persons benefically
interested in the land under this section. 1
(3.) Where co-owners of an estate or interest
in any land, 2 or in Scotland in any heritable
estate, not being itself partnership property,
are partners as to profits made by the use of
that land or estate, and purchase other land or
estate out of the profits to be used in like
manner, the land or estate so purchased belongs
to them, in the absence of an agreement to the
contrary, not as partners, but as co-owners for
the same respective estates and interests as
are held by them in the land or estate first
mentioned at the date of the purchase. 3
Illustrations.
1. Land bought in the name of one partner, and paid for by
the firm or out of the profits of the partnership business, is
partnership property unless a contrary intention appears. 4
2. One partner in a firm buys railway shares in his own
name, and without the authority of the other partners, but
with the money and on account of the firm. These shares are
partnership property. 5
3. The goodwill of the business carried on by a firm, so far
1 Cp. Lindley, 349, 350.
2 See note s , last page.
3 Cp. Illustration 6.
* Nerot v. Burnand (1827) 4 Russ, 247, 2 Bli. N. S. 215, 28 R. R.
65 ; IVcdderhum v. IVedderburn (1856) 22 Beav. at p. 104.
5 Jix parte Hinds (1863) 3 De G. & Sin. 603.
PARTNERSHIP PROPERTY. 67
as it has a saleable value, is partnership property, unless the Part I.
contrary can be shown. 1 sect. 20.
4. A. and B. take a lease of a colliery for the purpose of
working it in partnership, and do so work it. The lease is
partnership property. 3
5. A. and B., being tenants in common of a colliery, begin
to work it as partners. This does not make the colliery
partnership property. 3
6. If, in the case last stated, A. and B. purchase another
colliery, and work it in partnership on the same terms as the
first, the purchased colliery is not partnership property, but A.
and B. are co-owners of it for the same shares and interests as
they had in the old colliery. 3
7. "W., a nurseryman, devises the land on which his business
is carried on and bequeaths the goodwill of the business to his
three sons as tenants in common in equal shares. After his
death the sons continue to carry on the business on the land
in partnership. The land so devised to them is partnership
property. 4,
8. A. is the owner of a cotton-mill. A., B. and C. enter into
partnership as cotton-spinners, and it is agreed that the
business shall be carried on at this mill. A valuation of the
mill, fixed plant, and machinery is made, and the ascertained
value is entered in the partnership books as A.'s capital, and
he is credited with interest upon it as such in the accounts.
During the partnership the mill is enlarged and improved,
and other lands acquired and buildings erected for the same
purposes, at the expense of the firm. The mill, plant, jmd
1 Lindley, 336. See more as to goodwill, p. 110, below.
2 lb. 341 ; Crawshay v. Maule (1818) 1 Swanst. 495, 518, 523,
18 R. R. 126, 132, 136. A fortiori, where the colliery belongs
to A. alone before the partnership : Burdon v. Barkus (1862) 4
D. F. J. 42.
•» Implied in Steward v. Blalceway (1869) L. R. 4 Ch. 603 ; though
in that case it was treated as doubtful if there was a partnership
at all.
* Waterer v. TVaterer (1873) L. R. 15 Eq. 402. Cp. Davit v. Dams
[1894] 1 Ch. 393, 63 L. J. Ch. 219.
f2
money.
gg PARTNERSHIP ACT, 1890.
Part I. machinery, as well as the lauds afterwards purchased and the
Sect. io7~ buildings thereon, are partnership property ; and if, on a sale
of the business, the purchase-money of the mill, plant, and
machinery exceeds the value fixed at the commencement of
the partnership, the excess is divisible as profits of the
partnership business. 1
Property 21. Unless the contrary intention appears,
parfnerahip 1 property bought with money belonging to the
firm is deemed to have been bought on account
of the firm.
Illustrations.
1. L. and M. are partners. M., having contracted for the
purchase of lands called the T. estate, asks L. to share in it,
which he consents to do. The purchase-money and the amount
of a subsisting mortgage debt on the land are pajd out of the
partnership funds, and the land is conveyed to L. and M. in
undivided moieties. An account is opened in the books of the
firm, called " the T. estate account," in which the estate is
debited with all payments made by the firm on account thereof,
and credited with the receipts. The partners build each a
dwelling-house at his own expense on parts of the land, but
no agreement for a partition is entered into. The whole of
the estate is partnership property. 2
2. Land is bought with partnership money on the account
of one partner, and for his sole benefit, he becoming a debtor
to the firm for the amount of the purchase-mi >ney. This land
is not partnership property. 3
3. [One of two partners expends partnership moneys in
buying a ship, which is registered in his name alone. The
ship is not partnership property. l ]
1 Robinson v. Ashton (1875) L. R, 20 Eq. 25, 44 L. J. Ch. 542.
2 Ex parte M'Kenna (Bank of England Case) (1861) 3 D. F. J. 645.
3 3 D. F. J. 659 (1861) ; Smith v. Smith (1800) 5 Ves. 189, 5
R. R. 22.
4 ll'altmi v. Rutin- (18GI) -29 Boav. 428. This case aa reported
seems to go beyond the other authorities : but the facts are very
PARTNERSHIP PROPERTY. 69
It is not quite clear whether the interest of partners in Part I.
the partnership property is more correctly described as a Sect. 21.
tenancy in common or a joint tenancy without benefit Description of
J J interest of
of survivorship, but the difference appears to be merely partners in
i , l partnership
verbal. property.
It will be observed that the acquisition of land for
partnership purposes need not be an acquisition by pur-
chase to make the land partnership property. Land
coming to partners by descent or devise will equally be
partnership property, if, in the language of James, L.J.,
it is " substantially involved in the business." -
22. Where land or any heritable interest Conversion
therein has become partnership property, it estate of land
shall, unless the contrary intention appears, 3 partnership
be treated as between the partners (including
the representatives of a deceased partner), and
also as between the heirs of a deceased partner
and his executors or administrators, as personal
or moveable and not real or heritable estate. 4
The application of this rule does affect the character
of any property for the purposes of the Mortmain and
briefly given, and there may have been circumstances which do not
appear.
1 Lindley, 348. It follows in theory that if one partner's interest
is forfeited to the Crown, the whole property of the firm is forfeited ;
lb. 349 ; Blackst. Comm. ii. 409 ; but see Lindley, 570, note (d);
1 L. R. 15 Eq. 406 ; see Illustration 7 to sect. 20, p. 67, above.
- 1 See Re Wilson, Wilson v. Holloway [1893] 2 Oh. 340, 62 L. J. Ch.
781.
4 Cp. Lindley, 352. The conclusion there arrived at on the
balance of authorities is now declared to be law. It is believed that
the rule was well settled, and may safely be accepted in other common
law jurisdictions. Kindersley, V.-C, Darby v. Darby (1856)3 Drew.
495, 506 ; and see L. R. 4 Ch. 609 (1869).
property.
70 PARTNERSHIP ACT, 1890.
Part I. Charitable Trusts Act, 1888. x But a deceased partner's
Sect. 22. share in land that has become partnership property is
liable to probate duty, even if that partner's will purports
to deal with it as realty. 2 *
Conversion of It is to be observed that partners may at any time
separate by agreement between themselves convert partnership
verselv°by 011 ' Property into the several property of any one or more of the
agreement of partners, or the several property of any partner into
partnership property. And such conversion, if made in
good faith, is effectual not only as between the partners,
but as against the creditors of the firm and of the several
partners. 3 But if the firm or the partner whose separate
estate is concerned becomes bankrupt or is insolvent after
any such agreement and before it is completely executed,
the property is not converted. 4 Of course tenants in
common who are not partners may agree to treat their
land as converted, as on the other hand the intention not
to convert it may be clear enough to dispense with deciding
the question whether there is a partnership or not. 5
Illustration.
A. and B. dissolve a partnership which has subsisted between
them, and A. takes over the property and business of the late
firm. A. afterwards becomes bankrupt. The property taken
1 Ashworth v. Mann (1878-80) 15 Ch. Div. 363, 50 L. J. Ch. 107
(on the former so-called Mortmain Act of Geo. 2).
2 Att.-Gen. v. Hubbuch (1883-4) 10 Q. 15. D. 488, 13 Q. B. Div. 275,
52 L. J. Q. B. 464, 53 L. J. Q. B. 146.
3 Lindley, 343, 715 ; Campbell v. Miilldt (1S19-9) 2 Swaust. at
pp. 575, 584, 19 B. B. at pp. 138, 139, 145. As to what will or may
amount to conversion, see the judgments in At!. -Gen. v. Hubbuck, 13
Q. B. Div. 275, especially that of 15.. wen, L.J., at p. 289.
4 Lindley, 346-7 ; Ex parte Kempt ner (1869) L. B. 8 Eq. 286.
4 Re Wilson, Il'ikon v. Hvllvwaij [1893] 2 Ch. 340, 62 L. J. Ch.
781.
CONVERSION OF LAND. 71
over by A. from the late partnership has become his separate Part I.
estate, and the creditors of the firm cannot treat it as joint seotTiil
estate in the bankruptcy. 1
The share of a partner in the partnership property at What is a
any given time may be denned as the proportion of the share.
then existing partnership assets to which he would be
entitled if the whole were realized and converted into
money, and after all the then existing debts and liabilities
of the firm had been discharged. 2
Illustration.
F. and L. are partners and joint tenants of offices used by
them for their business. F. dies, having made his will, con-
taining the following bequest : "I bequeath all my share of
the leasehold premises ... in which my business is carried
on ... to my partner, L." Here, since the tenancy is joint
at law, "my share" can mean only the interest in the pro-
perty which F. hud as a partner at the date of his death —
namely, a right to a moiety, subject to the payment of the debts
of the firm ; and if the debts of the firm exceed the nssets, L.
takes nothing by the bequest. 3
23. — (1-) After the commencement of this Procedure
Act a writ of execution shall not issue against nership
any partnership property except on a judgment ^partner's r
, , -, n separate
against the firm. judgment
(2.) The High Court, or a judge thereof, or
the Chancery Court of the county palatine of
Lancaster, or a county court, may, on the
1 Ex parte Buffin (1801) 6 Ves. 119, 5 E. It. 237 ; see also the more
complex cases given at. pp. 147-149, below. The question whether
partnership property has been converted into separate property occurs
in fact chiefly, if not exclusively, in the administration of insolvent
partners' estates.
2 Lindley, 348.
3 Furquhar v. Hadden (1871) L. B. 7 Ch. 1, 41 L. J. Oh. 260.
debt.
72 PARTNERSHIP ACT, 1890.
application by summons of any judgment
creditor of a partner, make an order charging
that partner's interest in the partnership pro-
perty and profits with payment of the amount
of the judgment debt and interest thereon, and
may by the same or a subsequent order appoint
a receiver of that partner's share of profits
(whether already declared or accruing), and of
any other money which may be coming to him
in respect of the partnership, 1 and direct all
accounts and inquiries, and give all other
orders and directions which might have been
directed or given if the charge had been made
in favour of the judgment creditor by the
partner, or which the circumstances of the case
may require. 2
(3.) The other partner or partners shall be
at liberty at any time to redeem the interest
charged, or in case of a sale being directed, to
purchase the same.
(4.) This section shall apply in the case of
a cost-book company as if the company were
a partnership within the meaning of this Act.
(5.) This section shall not apply to Scotland.
This enactment puts an end to an inconvenience which
had long been felt but never hitherto remedied. At
1 This applies to a foreign firm having a branch in England :
Birnrn, Jauson d- Co. v. Hutchinson (No. 1) [1895] 1 Q. B. 737, 64
J,. J. Q. B. 359, C. A.
2 This sub-section does not, as a rule, entitle the judgment creditor
PROCEDURE AS TO SEPARATE JUDGMENT DEBTS. 73
■common law partnership property was exposed to be taken in Part x
■execution for a separate debt of any partner, and it was Seot 23
the sheriff's duty to sell the debtor's interest in the goods
seized, although it was generally impossible to ascertain
what that interest was, unless by taking the partnership
accounts. It is no secret that the present amendment of
the law is due to the counsels of Lord Lindley. 1
Where judgment has been given in an action in the
Chancery Division for the dissolution of a partnership,
and a receiver appointed, and afterwards a creditor recovers
judgment against the firm in an action in the Queen's
Bench Division, the judgment creditor can obtain, by
.applying in the Chancery action, a charge for the debt
and costs on the partnership money in the hands of or
■coming to the receiver, undertaking to deal with the
charge according to the order of the Court. 2
Cost-book companies are not generally within this Act
■(sect. 1, sub-sect. 2, cl. (c) ) ; but in the interest of justice
and convenience this section is, by sub-sect. 4, specially
made to include them.
The following Rules of Court have been made for the
purposes of this section : —
"Every summons by a separate judgment
creditor of a partner for an order charging his
interest in the partnership property and profits
under section 23 of the Partnership Act, 1890
.to have accounts rendered him by the other partners, as an express
.assignment (sect. 31) would not give him that right : Brown,
Janson& Go. v. Hutchinson (No. 2) [1895] 2 Q. B. 126, 64 L. J. Q. B.
■619, C. A.
1 For the old law, see Lindley, 5th ed. 356-62 ; Whetham. v.
Davey (1885) 30 Ch. D. at p. 579 ; Helmore v. Smith (1887) 35
<Ch. Div. 436. Cp. sect. 33, p. 93, below.
1 Kewney v. Attrill (1886) 34 Ch. D. 345, 56 L. J. Ch. 448.
74 PARTNERSHIP ACT, 1890.
Parti. (53 & 54 Vict. c. 39), and for such other
sect. 23. orders as are thereby authorised to be made,,
shall be served in the case of a partnership
other than a cost-book company on the judg-
ment debtor and on his partners or such of
them as are within the jurisdiction or in the
case of a cost-book company on the judgment
debtor and the purser of the company ; and
such service shall be good service on all the-
partners or on the cost-book company as the
case may be, and all orders made on such
summons shall be similarly served. 1
"Every application which shall be made by
any partner of the judgment debtor under the
same section shall be made by summons, and
such summons shall be served in the case of a.
partnership other than a cost-book company on
the judgment creditor and on the judgment
debtor, and on such of the other partners as.
shall not concur in the application and as shall
be within the jurisdiction, or in the case of a.
cost-book company on the judgment creditor
and on the judgment debtor and on the purser
of the company, and such service shall be good
service on all the partners or on the cost-book
company as the case may be, and all orders made-
on such summons shall be similarly served." 2
1 Order XLVI. r. 1a. (June, 1891.) There do not appear to.
be any reported decisions on the practice.
3 lb. i: In. A charging order under sect. 23 is not a "transaction '
RULES AS TO DUTIES OF PARTNERS. ,75
24. The interest of partners in the part- Part i.
nership property and their rights and duties in Sect ' 24 -
relation to the partnership shall be determined, interests and
subject to any agreement express or implied partner's sub-
between the partners, by the following rules : 1 ig C r eement ml
(1.) All the partners are entitled to share
equally in the capital and profits of the
business, and must contribute equally
towards the losses whether of capital or
otherwise sustained by the firm.
(2.) The firm must indemnify every partner
in respect of payments made and personal
liabilities incurred by him —
(a.) In the ordinary and proper conduct
of the business of the firm ; or,
(b.) In or about anything necessarily
clone for the preservation of the
business or property of the firm. 2
(3.) A partner making, for the purpose of the
partnership, any actual payment or advance
beyond the amount of capital which he has
agreed to subscribe, is entitled to interest at
the rate of five per cent, per annum from
the date of the payment or advance. 3
protected by sect. 49 of the Bankruptcy Act, 1883 ; Wild v.
Southwood [1897] 1 Q. B. 317, 66 L. J. Q. B. 166.
1 Cp. I. C. A. 253.
2 Ex parte Chippendale {German Mining Company 's Case) (1853) 4
D. M. G. 19 ; Bunion v. Barhus (1862) 4 D. F. J. 42, 51.
i Ex parte Chippendale, last note ; Sargood's Claim (1872) L. R. 15
Eq. 43 ; Lindley, 391.
76
Parti
PAIITSEHSHIP ACT, 1890.
(4.) A partner is not entitled, before the
sect. 24. ascertainment of profits, to interest on
the capital subscribed by him.
(5.) Every partner may take part in the
management of the partnership business.
(6.) No partner shall be entitled to remunera-
tion for acting in the partnership business.
(7.) No person may be introduced as a
partner without the consent of all existing
partners.
(8.) Any difference arising as to ordinary
matters connected with the partnership
business may be decided by a majority of
the partners, but no change may be made
in the nature of the partnership business
without the consent of all existing partners.
(9.) The partnership books are to be kept at
the place of business of the partnership
(or the principal place, if there is more
than one), and every partner may, when
he thinks fit, have access to and inspect
and copy any of them. 1
This section declares the working rules implied by law
in every partnership, except so far as excluded or varied
hy the consent of the parties in the particular case. It will
be convenient to comment on the sub-sections separately.
1 limit rex v. Omttirx (1847) 1 De G. & Sm. 692, see the terms
of the order there ; and ep. Lindley, 421, and see p. 82, below.
Where a firm has move than one place, of business, it should
always be expressly provided by the partnership articles which shall
RULES AS TO DUTIES OF PARTNERS. 77
Part I.
Sect. 24.
(1.) As to the presumed equality of shares.
Equality in sharing profit and loss, independent of the
shares of original capital contributed by the partners, is
the only rule applicable in the absence of special agree-
ment. The value of a particular member to the firm,
derived from his skill, experience, or business connexion,
may be wholly out of proportion to the amount of capital
brought in by him. The Court, therefore, cannot under-
take to apportion profits where the partners have not done
so themselves. Equality is equity, not as being absolutely
just, but because it cannot be known that any particular
degree of inequality would be more just.
(2.) As to rights of Partners to indemnity and contribution.
Generally speaking, every partner is the agent of the This right is
of agency.
firm for the conduct of its business (sect. 5), and as such nTaMi^v 611 *
is entitled to indemnity on the ordinary principles of the
law of agency. But the rights of a partner to contribu-
tion go beyond this : he may charge the firm with moneys
necessarily expended by him for the preservation or con-
tinuance of the partnership concern. This right must be
carefully distinguished from the power of borrowing money
on the credit of the firm, of which it is altogether indepen-
dent. 1 It arises only where a partner has incurred expense
which under the circumstances, and having regard to the
nature of the business, was absolutely necessary, and the
firm has had the benefit of such expense ; as where the
advances are made to meet immediate debts of the firm
(which is the most frequent case), or to pay the cost of
be considered the principal place of business and where, the books are
to be kept.
1 4 D. M. G. 35, 40 (1853).
78 PARTNERSHIP ACT, 1890.
Part I. operations without which the business cannot go on, such
Sect. 24. as sinking a new shaft when the original workings of a
mine are exhausted. 1
The total amount recoverable is not necessarily limited
by the nominal capital of the partnership, for the expendi-
ture on existing undertakings cannot be measured by the
Limit of con- extent of the capital. 3 On the other hand, the limit of
tribution may
be fixed by contribution may be fixed beforehand by express agree-
agreemen . men t; among the members of a firm, and in that case no
partner can call upon the others to exceed it, however
great may have been the amount, of his own outlay on
behalf of the firm. 3 This has nothing to do with the
obligations of the partners to third persons, who accord-
ingly remain entitled to hold every partner liable for the
whole amount of the debts of the partnership, unless they
have agreed to look only to some particular fund.
This duty imposed on the firm to indemnify any one of
its members against extraordinary outlays for necessary
purposes is one of a class of duties quasi ex contractu which
are recognized by the law of England only very sparingly
and under special circumstances. It is outside the rules of
agency, 4 and has still less to do with trust ; real analogies
are to be found in salvage and average.
(5.) As to the Right of Partners to take part in the Business.
Although it is the rule, in the absence of special agree-
ment, that " one partner cannot exclude another from an
1 Bunion v. Barhis (1862) 4 D. F. J. 42 ; Ex parte Williamson
(1869) L. R, 5 Ch. 309, 313 ; cp. Lindley, 201, note (x).
- A'.r parte Cliippendalc (1853) 4 D. M. G. at p. 42.
1 U'onrxtcr Com Exchange Company (1853) 3 D. M. G. 180.
4 The Lord Justice Turner, however, seems to assume an implied
authority : 4 D. M. G. 40.
RULES AS TO DUTIES OF PARTNERS. 79
equal management of the concern," 1 yet it is "perfectly Parti,
competent," and in practice very common, " for partners Sect. 24.
to agree that the management of the partnership affairs
shall be confided to one or more of their number exclusively
of the others;" 3 and in that case the special agreement
must be observed.
(6.) Duty of gratuitous diligence in partnership business.
This rule, like the preceding, may be, and often is,
departed from by express agreement. The second branch
of it does not prevent a partner from recovering compensa-
tion for the extra trouble thrown upon him by a co-partner
who has disregarded the first branch by wilful inattention
to business. 3
(7.) Consent of all required for admission of new Partner.
This is given by Lord Lindley* as " one of the funda-
mental principles of partnership law." The reason of it
is that the contract of partnership is presumed to be
founded on personal confidence between the partners, and
therefore not to admit of its rights and duties being trans-
ferred as a matter of course to representatives or assignees.
A partner can indeed assign or mortgage to a stranger Assignment
his interest in the profits of the firm ; and it was settled °^ s re °
before the Act that the assignee or mortgagee would
thereby acquire " a right to payment of what, upon taking
the accounts of the partnership, might be due to the
assignor or mortgagor." 5 It is now declared by the Act
1 Rowe v. Wood (1822) 2 Jao. & W. at p. 558, 22 R. R. 211.
2 Lindley, 312, 313.
3 Airey v. Borham (1861) 29 Beav. 620.
4 Lindley, 366 ; cp. I. C. A. 253, sub-s. 6.
Lindley, 367 ; sect. 31, p. 91, below.
80 PARTNERSHIP ACT, 1890.
Part I. (sect. 31, below) that he cannot call on the other partners to
Sect. 24. account with him (as before the Act he probably, though
not quite certainly, could not), and his claim is subject to
all their existing rights. 1
Since the Act it seems that the assignment of a partner's
share does not in any case work a dissolution of itself, or
give the other partners an absolute right to have the part-
nership dissolved. Sect. 33, sub-sect. 2, does give that right
in the event of a partner allowing his share to be charged
under sect. 23 for his separate debt. But the fact of a
partner having alienated his share so as to deprive himself
of substantial interest in the firm would be a circumstance
for the consideration of the Court in determining whether
it was just and equitable to order a dissolution under
sect. 35.°
An unauthorized attempt by one partner to admit a new
member into the firm, otherwise than by assignment of
his share, would have at most the effect of creating a sub-
partnership between himself and the new person ; that is,
there would be as between themselves a partnership in his
shares of the profits of the original firm. But as against
the original firm itself the new comer would have no rights
whatever. 3 " Qui admittitur socius ei tantum socius est,
qui admisit ; et recte, cum enim societas consensu contra-
hatur, socius mihi esse non potest, quern ego socium esse
nolui. Quid ergo si socius meus eum admisit ? ei soli
socius est. Nam socii mei socius meus socius non est." i
Shares firms- On the other baud, the interest of all or anv of the
ierablc by
agreement. partners may be made assignable or transmissible by
1 Kelly v. Hutton (1868) L. R. 3 Ch. 703 ; cp. JVhetham v. Davey
(1885) 30 Ch. D. f>74.
■ See Liiulloy, r>7. r >-0.
: ' Liiullev, 54 ; llroim , . Be Tastd (1821) Jac. 284, 23 R. R. 59.
4 UJpisii, D. 12, 1,pro socio, 19, 20.
POWERS OF MAJORITY. 81
express agreement ; and such agreement may be embodied Fart I.
once for all in the original constitution of the partnership. 1 Sect. 24.
It is quite common in practice for a senior partner to
reserve the power of introducing one or more new partners
at any time, or after a certain time. The persons so
introduced are generally sons or kinsmen. Often, but
not always, they are named in the original articles.
(8.) Power of majority to decide differences.
There is a somewhat strange lack of positive judicial
authority on the power of a majority in matters occurring
in the ordinary conduct of business and not expressly pro-
vided for. Sir G. Jessel is believed to have intimated in
one or more unreported cases an opinion that a majority
of the partners has not any power whatever implied by
law. But the rule that in such matters the mind of the
greater number must prevail is universal in modern business
practice, and is the undoubted rule of company law. The
Indian Contract Act had already recognized it, as it is now
recognized and confirmed by the principal Act. Whether
the power of a majority be exercised under this sub-section
or under an express agreement in the partnership articles,
the decision must be arrived at in good faith for the interest
of the firm as a whole, and every partner must have an
opportunity of being heard. 2 The rule that a change in
the nature of the business can be made only by consent of
all the partners 3 is one of the rules of partnership law
1 Lindley, 368.
2 Const v. Harris (1824) T. & B. 496, 518, 525, 24 E. E. 108, 126,
132 ; Blisset v. Daniel (1853) 10 Ha. 493, 522, 527.
s Natusch v. Irving, Lindley, 5th ed. 316 (and see 6th ed. 328) ;
Const v. Harris (1824) T. & B. at p. 517, 24 E. E. 126 ; I. C. A. 253,
sub-s. 5. As to place, Clements v. Norris (1878) 8 Ch. Div. 129, 47
L. J. Ch. 546, which shows that one partner cannot without the
V. g
82 PARTNERSHIP ACT, 1890.
Part I. which applies equally to companies ; and in that applica-
Sect. 24. tion it is of great importance. " The governing hody of a
corporation that is in fact a trading partnership cannot in
general use the funds of the community for any purpose
other than those for which they were contributed." 1
But it would not be relevant here to pursue this subject
farther.
(9.) Right to copy books.
A partner's right to make extracts from the books while
he is a member of the firm does not give him any privilege
to use those extracts for purposes hostile or injurious to
the firm after he has ceased to be a partner. 3
Power to 25. No majority of the partners can expel
Gxp61 I'lirliior,
any partner unless a power to do so has been
conferred by express agreement between the
partners.
Under this section, which affirms the law as it stood, a
majority not only must not but can not expel any partner
without a power expressly conferred. An attempt to expel
a partner without such power, or without complying with
the conditions of good faith applicable to all powers of
majorities, as mentioned under sub- sect. 8 of sect. 24, 3 is
merely void and of no effect. A partner so dealt with has,
therefore, no cause of action for damages, 4 for he is still a
consent of the others even renew an expired lease of premises where
partnership works have already been carried on.
1 Wickcns, V.-C, in Pickering v. Sttphcnsmi (1872) L. E. 14 Eq
322, 340, 41 L. J. Ch. 493.
2 Trajn v. Hunt [1896] A. C. 7, 26, per Lord Davey.
3 See also Steuart v. 1,'hihtime (1879) 10 Ch. Div. (526, 650.
4 Wood v. ll'oad (1874) L. R. 9 Ex. 190 ; 43 L. J. Ex. 190. In
this ciise the association in question was not really a partnership
POWER TO EXPEL PARTNER. 83
partner and has suffered no more loss in contemplation of Part I.
law than if the majority had purported to pass a criminal Sect. 25.
sentence on him, or to deprive him of his rights in any
other ohviously unauthorized way. His proper remedy is
to claim reinstatement in his rights as a partner. 1 In the
case of expulsion the conditions of good faith include
a reasonable preliminary warning and opportunity of
explanation. 3
In one case 3 an attempt was made, but without success,
to extend this rule by analogy to the case of a clause
in partnership articles expressly empowering one of the
partners to determine the partnership by notice if he were
dissatisfied with the conduct or results of the business.
It was held that this was not analogous to an expulsion,
and that, the partner in question being the sole judge of
his own dissatisfaction, the power could be exercised at his
absolute will and pleasure.
26. — (1.) Where no fixed term has been Retirement
agreed upon for the duration of the partner- shipatwm.
ship, any partner may determine the partner-
ship at any time on giving notice of his
intention so to do to all the other partners.
(2.) Where the partnership has originally
been constituted by deed, a notice in writing,
signed by the partner giving it, shall be
sufficient for this purpose.
There was formerly some doubt whether, in the case of
a partnership constituted by deed, and being or having
though spoken of as such : but for this purpose the principle is
the same.
1 Blisset v. Daniel (1853) 10 Ha. 493.
2 Barnes v. Youngs [1898] 1 Ch. 414, 67 L. J. Ch. 263.
3 Russell v. Russell (1880) 14 Ch. D. 471, 49 L. J. Ch. 268.
G2
84
PARTNERSHIP ACT, 1890.
Part I.
Sect. 26.
Where part-
nership for
term is con-
tinued over,
continuance
on old terms
presumed.
become by expiration of the term provided for (see next
section) a partnership at will, a notice of dissolution ought
not likewise to be under seal. By the present enactment
the better, and certainly more convenient, opinion 1 is
established. On principle it would seem that no real
objection arises from the rule that covenants entered into
by deed can be released only by deed. For all the agree-
ments in a partnership contract, whether by deed or with-
out deed, are conditional on the continuance of the relation
of partnership, save so far as they expressly or by necessary
implication have regard to things to be done after dissolu-
tion. By a dissolution, therefore, they are not released,
but determined. Similarly, a tenant at will might enter
into covenants without prejudice to the lessor's right to
determine the tenancy by parol.
27. — (1-) Where a partnership entered into
for a fixed term is continued after the term
has expired, and without any express new
agreement, the rights and duties of the part-
ners remain the same as they were at the
expiration of the term, so far as is consistent
with the incidents of a partnership at will. 2
(2.) A continuance of the business by the
partners or such of them as habitually acted
therein during the term, without any settle-
ment or liquidation of the partnership affairs,
is presumed to be a continuance of the part-
nership. 3
1 LhuUty, 5H0.
- Cp. I. V. A. •?;->(;.
3 Parsons v. Haijmird (ISO:}) 4 D. F. J. 4*74.
CONTINUANCE AFTER EXPIRATION OF TERM. 85
Part I.
Illustrations.
1. A clause in partnership articles entered into between
A. and B. for a fixed term provides that, " in case either of
the said partners shall depart this life during the said co-part-
nership term," the surviving partner shall purchase his share
at a fixed value. A. and B. continue their business in partner-
ship after the expiration of the term. This clause is still
applicable on the death of either of them. 1
2. Articles for a partnership for one year contain an arbi-
tration clause, and the partnership is continued beyond the
year. The arbitration clause is still binding. 3
3. A. and B. are partners for seven years, A. taking no
active part in the business. After the end of the seven years
B. continues the business in the name, on the premises, and
with the property of the firm, and without coming to an
account. The partnership is not dissolved, and A. is entitled
to participate on the terms of the original agreement in the
profits thus made by B. 3
4. Partnership articles provide that a partner wishing to
retire shall give notice of his intention a certain time before-
hand. If the partnership is continued beyond the original
term, this provision does not hold good, as not being consistent
with a partnership at will. 4
5. A. and B. enter into partnership for seven years, under
articles which empower either partner, if the other neglects
1 Essex v. Essex (1855) 20 Beav. 442 ; Cox v. Willoughby (1880) 13
Ch. D. 863, 49 L. J. Ch. 237. Cookscm v. Coolcson (1837) 8 Sim. 529,
must be considered as not being law on this subject. Yates v. Finn
(1880) 13 Ch. D. 839, does not break the current of authority, for the
opinion there reported incidentally (the case being mainly on other
points) on a more or less similar clause turns out to have been justified
by the presence of special stipulations not applicable to a partnership
at will. See Daw v. Herring [1892] 1 Ch. 284, 289.
2 Gillett v. Thornton (1875) L. R. 19 Eq. 599, 44 L. J. Ch. 398.
3 Parsons v. Hayward (1862) 4 D. F. J. 474.
4 Featherstonhaugh v. Fenwich (1810) 17 Ves. at p. 307, 11 R. R.
at p. 81.
Sect. 27.
86
PARTNERSHIP ACT, 1S90.
Part I.
' Seet. 27.
Where
business con-
tinued by
surviving
partners.
the business, to dissolve the partnership by notice, and pur-
chase his share at a valuation. They continue in partnership
after the seven years. This power of dissolution on special
terms can no longer be exercised, as either party may now
dissolve the partnership at will. 1
The same rule has been substantially acted upon in
the case of a business being continued by the surviving
partners after the death of a member of the original firm ; 3
the Court inferred as a fact from their conduct that the
business was continued on the old terms ; but it is probably
safe to assume that here also, if there were nothing more
than a want of evidence to the contrary, a continuance on
the old terms would be presumed.
In the Scottish appeal of Xeilson v. Mossend Iron Co. 3
the House of Lords held that a clause providing for the
optional retirement of any partner on special terms " three
months before the termination of this contract," was not
applicable to the partnership as continued after the expira-
tion of the original term. But this decision was on the
construction of "a strangely and singularly worded article"
(per Lord Selborne, at p. 304). Lord Watson affirmed
the general rule that "when the members of a mercantile
firm continue to trade as partners after the expiry of their
original contract without making any new agreement, that
contract is held in law to be prolonged or renewed by tacit
consent, or, as it is termed in the law of Scotland, by ' tacit
relocation.' The rule obtains in the case of many contracts
besides that of partnership ; and its legal effect is that all
the stipulations and conditions of the original contract
1 Clark v. Leach (18U2) 32 Beav. 14, 1 D. J. S. 409 ; see the M. R.'s
judgment, 32 Beav. 21.
2 King v. Chuck (1853) 17 Beav. 325.
■' 11 App. Ca. 298 (1886).
DUTY OF PARTNERS TO RENDER ACCOUNTS, ETC. 87
remain in force, in so far as these are not inconsistent with Part I.
any implied term of the renewed contract." In this case, Sect. 27
however, time was of the essence of the condition
(pp. 308, 311).
In a later case 1 it was held that a clause giving one
partner an option of buying the other's share within three
months " after the expiration or determination of the part-
nership by effluxion of time " did apply to the partnership
as continued after the expiration of the original term, and
that Neilson v. Mossend Iron Co. really confirmed the
previous authorities.
28. Partners are bound to render true Duty of
accounts and full information of all things render
«• i • , i l • , i • accounts, &c.
artecting the partnership to any partner or his
legal representatives. 2
Where written partnership articles are entered into, a
clause to this effect is almost always inserted. There is
no doubt, however, that the obligation of uberrima fides is
incidental to the nature of the partnership contract, and
the only object of expressing it on these occasions is to
remind the partners of the duties imposed on them by the
general law. The same remark applies to several other
things which are usually expressed in such instruments.
The practice is not altogether consistent with the general
principles of conveyancing, but appears in this case to
have been reasonable and useful. Since the Act it may
perhaps be safely dispensed with.
1 Daw v. Herring [1892] 1 Ch. 284, 61 L. J. Ch. 5 (Stirling, J.).
3 Cp. I. C. A. 257, which reads " to carry on the business of the
partnership for the greatest common advantage, to be just and
faithful to each other, and to render,'' &c.
PARTNERSHIP ACT, 1890.
Part I.
Sect. 29.
Account-
ability of
partners for
private
profits.
29. — (1.) Every partner must account to the
firm for any benefit derived by him without the
consent of the other partners from any trans-
action concerning the partnership, or from any
use by him of the partnership property name or
business connection. 1
(2.) This section applies also to transactions
undertaken after a partnership has been dis-
solved by the death of a partner, and before
the affairs thereof have been completely wound
up, either by any surviving partner or by the
representatives of the deceased partner.
Illustrations.
1. A., B. and C. are partners in trade. C, without the
knowledge of A. and B., obtains for his sole benefit a renewal
of the lease of the house in which the partnership business is
carried on. A. and B. may at their own option treat the
renewed lease as partnership property. 3
It would [probably] make no difference if C. had given-
notice to A. and B. that he intended to apply for a renewal of
the lease for his own exclusive benefit. 3
2. A., B., C. and D. are partners in the business of sugar
refiners. C. is the managing partner, and also does business
separately, with the consent of the others, as a sugar-dealer.
He buys sugar in his separate business, and sells it to the firm
at a profit at the fair market price of the day, but without
1 Op. I. C. A. 258. Per Lindley, L.J., .4ns v. Benham [1891]
2 Ch. 244, 255 (in an action brought before the commencement of
the Act).
2 Featherstoiihaugh v. Fcnwick (1810) 17 Ves. 298, 11 E, R. 77 ;
r. 0. A. 258, Illust. ft.
3 Clajif v. Edmondson (1857) 8 D. M. G. 787, 807.
DUTY OF PARTNERS TO RENDER ACCOUNTS, ETC. 89
letting the other partners know that the sugar is his. The Part I.
firm is entitled to the profit made on every such sale. 1 Sect. 29.
3. A., B. and C. acquire the lease of certain works for the
purposes of a business carried on by them in partnership, A.
conducting the transaction with the former lessees on behalf
of the firm. The former lessees, being anxious to find a
responsible assignee and get the works off their hands, pay a
premium to A. A. must account to his partners for the money
thus received. 3
i. One of two partners in a firm which held leaseholds for
the purposes of the business dies. The lease expires before
the affairs of the firm are completely wound up, and the sur-
viving partner renews it. The renewed lease is partnership
property. 3
5. A member of a firm agrees to take a lease in his own
name, but in fact for partnership purposes, and dies before the
lease is executed. His representatives cannot deal with the
lease without the consent of the surviving partners. 4
The general principle is one of those which the law of Parallel rule
in agency.
partnership takes from agency, considering each partner as
agent for the firm ; or it is perhaps better to say that it is
established in both these branches of the law on similar
grounds. The rule that an agent must not deal on his
own account or make any undisclosed profit for himself in
the business of his agency is a stringent and universal one. 5
30. H a partner, without the consent of the Duty of
. . partner not
other partners, carries on any business ot the to compete
with firm.
1 Bentley v. Craven (1853) 18 Beav. 75.
2 Fawce'tt v. Whitehouse (1829) 1 Euss. & M. 132, 32 E. E. 163.
3 Clements v. Hall (1857) 2 De G. & J. 173, 186. The surviving
partner is sometimes called a trustee or quasi trustee of the partner-
ship property. But this use of the term is at least doubtful ; see
Lord Westbury's remarks in Knox v. Gye (1871-2) L. E. 5 H. L. at
p. 675.
4 Alder v. Fouracre (1818) 3 Swanst. 489, 19 E. E. 256.
» Story on Agency, §§ 210, 211.
90 PARTNERSHIP ACT, 1890.
Part i. same nature as and competing with that of the
sect. 30. fi rni; he must account for and pay over to the
firm all profits made by him in that business. 1
This is an elementary rule analogous to the last. It
follows that no partner can, without the consent of the
rest, be a member of another firm carrying on the like
business in the same field of competition ; and if that
consent is given, he is limited by its terms. And if special
knowledge is acquired by him as a member of the one
firm, he must not use it for the benefit of the other and
to the prejudice of the first. And this equally holds if
several members, or even all the members but one, are
common to both firms.
If A., B., C. and D. are the proprietors of a morning
newspaper, and A., B. and C. the proprietors of an
evening newspaper for which the types and plant of the
morning paper are used by agreement, D. may restrain
A., B. and C. from first publishing in A., B. and C.'s
evening paper intelligence obtained by the agency of the
morning paper, and at the expense of the firm of A., B.,
C. and D. 3 But this rule is not extended to a really
different business, though the same knowledge and informa-
tion may be useful in both. 3
An express covenant in partnership articles not to
" engage in any trade or business except upon the account
and for the benefit of the partnership," has been held to
add nothing to the duty already imposed by law. It does
not entitle the firm to an account of profits against a
partner who has engaged in an independent trade not
within the scope of the partnership business, and who
1 Cp. I. 0. A. 259. Per Lindley, L.J. [1891] 2 C'h. at p. 255.
- Glassington v. Thmiiks (1822-3) 1 Sim. & St. 124, 24 R. R. 153.
3 Aas v. BenJutm [1891J 2 Ch. 244, C. A.
DISSOLUTION OF PARTNERSHIP. 91
derives no advantage in it from bis position as a partner Part I.
or by tbe use of any property of the firm. 1 Sect. 31.
31. — (1.) An assignment by any partner of Eights of
his share in the partnership, either absolute share in
or by way of mortgage or redeemable charge, par "''
does not, as against the other partners, entitle
the assignee, during the continuance of the
partnership, to interfere in the management
or administration of the partnership business
or affairs, or to require any accounts of the
partnership transactions, or to inspect the part-
nership books, but entitles the assignee only
to receive the share of profits to which the
assigning partner would otherwise be entitled,
and the assignee must accept the account of
profits agreed to by the partners.
(2.) In case of a dissolution of the partner-
ship, whether as respects all the partners or as
respects the assigning partner, the assignee is
entitled to receive the share of the partnership
assets to which the assigning partner is entitled
as between himself and the other partners, and,
for the purpose of ascertaining that share, to
an account as from the date of the dissolution.
Tbis section may be said to declare existing law, tbougb
one or two details were perbaps not covered by authority.
See the commentary on sect. 24, sub-sect. 7, above.
1 Dean v. MacDowell (1877-8) 8 Ch. D. 345, 47 L. J. Ch. 537,
explained and followed in Aas v. Benham [1891] 2 Ch. 244, C. A.
92 PARTNERSHIP ACT, 1890.
Part *■ Dissolution of Partnership and its Consequences.
Dillon 32. Subject to any agreement between the
of notice tion partners, a partnership is dissolved —
(a.) If entered into for a fixed term, by the
expiration of that term :
(b.) If entered into for a single adventure
or undertaking, by the termination of that
adventure or undertaking :
(e.) If entered into for an undefined time,
by any partner giving notice to the other
or others of his intention to dissolve the
partnership.
In the last-mentioned case the partnership is
dissolved as from the date mentioned in the
notice as the date of dissolution, or, if no
date is so mentioned, as from the date of
the communication of the notice.
" Where no term is expressly limited for its duration,
and there is nothing in the contract to fix it, the partner-
ship may he terminated at a moment's notice by either
party. By that notice the partnership is dissolved to this
extent, that the Court will compel the parties to act as
partners in a partnership existing only for the purpose of
winding up the affairs." 1
The dissolution takes place as from the date of the
notice, and without regard to the state of mind of the
partner to whom the notice is given. Insanity on his part
does not make it loss effectual.- Of insanity as a special
1 Oiiurnhitii v. Manle (1818) 1 Swiinst, at p. 508. 18 R. K. atp. 132.
> Mrllnsh \: K,;,i (185!)) -27 lieav. L'3(i ; Jones v. Lloyd (1874)
L. R. KS Eq. 2(>5, 43 L. .1. Oh. 82(5.
DISSOLUTION BY BANKRUPTCY, DEATH, ETC. 93
ground of dissolution when the partnership is not at will Part I.
we shall speak presently. A valid notice of dissolution Sect. 32.
once given cannot be withdrawn except by consent of all
the partners. 1
Where a partnership has been entered into for a fixed
term, the partnership is at the end of that term dissolved
"by effluxion of time " without any further act or notice,
except in cases provided for in sect. 27, above.
33. — (1.) Subiect to any agreement between Dissoiutionby
kjkj. V I J \- ■ v i A bankruptcy,
the partners, every partnership is dissolved death, or
as regards all the partners by the death or
bankruptcy of any partner. 2
(2.) A partnership may, at the option of the
other partners, be dissolved if any partner suffers
his share of the partnership property to be
charged under this Act for his separate debt. 3
34. A partnership is in every case dissolved Dissoiutionby
by the happening of any event which makes it partnership.
1 Jones v. Lloyd (1874) L. R. 18 Eq. at p. 271.
2 Before January 1, 1883, if a female partner married without
settling her share in the partnership to her separate use, the partner-
ship was dissolved (but see Ashworth v. Outram (1877) 5 Oh. Div.
923). Me Child* (1874) L. E. 9 Ch. 508, 43 L. J. Bky. 89, shows
that, for administrative purposes at least, a wife entitled for her
separate use to a share of the profits of her husband's business may
be considered as his partner. The Married Women's Property Act,
1882 (45 & 46 Vict. c. 75), ss. 1, 2, seems to make it clear that the
marriage of a female partner would not now dissolve the partnership,
and the amending Act of 1893 (56 & 57 Vict, u 63) seems rather to
confirm this. It has been suggested, however, that the marriage
might be held a "just and equitable" cause for judicial dissolution
under sect. 35 (/). The case of outlawry appears to be purposely
passed over by the present Act as having no practical importance.
' 3 See sect. 23, p. 71, above.
94 PARTNERSHIP ACT, 1890.
unlawful for the business of the firm to be
carried on or for the members cf the firm to
carry it on in partnership. 1
Illustrations.
1. A. and B. charter a ship to go to a foreign port and
receive a cargo on their joint adventure. ^Var breaks out
between England and the country where the port is situated
before the ship arrives at the port, and continues until after
the time appointed for loading. The partnership between A.
and B. is dissolved. 3
2. A. is a partner with ten other persons in a certain
business. An Act is passed which makes it unlawful for more
than ten persons to carry on that business in partnership. The
partnership of which A. was a member is dissolved.
3. A., an Englishman, and domiciled in England, is a
partner with B., a domiciled foreigner. TVar breaks out
between England and the country of B.'s domicil. The
partnership between A. and B. is dissolved. 3
Dissolution 35 On application by a partner the Court
by the Court. SJyJ ' l L J L
may decree a dissolution of the partnership in
any of the following cases :
(a.) "When a partner is found lunatic by
inquisition, 4 or in Scotland by cognition,
1 Op. I. C. A. 255.
2 See Esposito v. Bowden (1857) 7 E. & B. 763, 27 L. J. Q. B. 17.
3 Griswold v. Waddington (1818) (Supreme Court, Xew York), 15
Johns. 57 ; 16 ib. 438.
4 By sect. 119 of the Lunacy Act, 1890 (53 Vict. c. 5), which from
May 1, 1890 (see sect. 3), repeals and supersedes the Lunacy Regula-
tion Act, 1853, ''where a person being a member of a partnership
becomes lunatic, the judge may, by order, dissolve the partnership "
(for the jurisdiction of a judge in lunacy, see sect. 108 : it is exercise-
able by any one or more of the Lord Chancellor and such judges of
the Supreme Court as may be appointed by siyn manual).
The committee of the estate can be authorized and required, under
GROUNDS OF DISSOLUTION. 95
or is shown to the satisfaction of the Court ?art i-
to be of permanently unsound mind, in
either of which cases the application may
be made as well on behalf of that partner
by his committee or next friend or person
having title to intervene as by any other
partner : l
(b.) When a partner, other than the partner
suing, becomes in any other way perma-
nently incapable of performing his part of
the partnership contract : 2
(c.) "When a partner, other than the partner
suing, has been guilty of such conduct as,
in the opinion of the Court, regard being
had to the nature of the business, is calcu-
lated to prejudicially affect the carrying on
of the business : 3
(d.) When a partner, other than the partner
suing, wilfully or persistently commits a
breach of the partnership agreement, or
the general powers of sects. 120, 124, to do or concur in all acts
rendered necessary. The powers of this part of the Act are not
confined to lunatics so found by inquisition : for the other categories,
see sect: 116.
1 Lindley, 566—569 ; Jones v. Noy (1833) 2 M. & K. 125, 39 E. E.
160 ; Anon. (1855-6) 2 K. & J. 441 ; Leaf v. Coles (1851) 1 D. M. G.
171. It is well settled that lunacy does not of itself work a dissolu-
tion. Pending an action for dissolution on this ground, the Court
can grant an injunction to restrain the defendant from interfering
in the partnership business : J. v. S. [1894] 3 Ch. 72, 63 L. J.
Ch. 615.
3 WUtwell v. Arthur (1865) 35 Beav. 140.
3 Essel v. Hayward (1860) 30 Beav. 158.
Sect. 35.
96 PARTNERSHIP ACT, 1890.
Parti. otherwise so conducts himself in matters
Seot > 36 ' relating to the partnership business that it
is not reasonably practicable for the other
partner or partners to carry on the business
in partnership with him : :
(c) When the business of the partnership
can only be carried on at a loss : 2
(/.) "Whenever in any case circumstances have
arisen which, in the opinion of the Court,
render it just and equitable that the
partnership be dissolved.
It might be difficult to find a reported decision precisely
in point on every part of this section. There is no doubt,
however, that the enactment correctly represents the
modern practice of the Chancery Division.
Dissolution at It is to be observed that the right of having the partner-
suit of partner ,.,.■,-,., ,. ..
of unsound ship dissolved in the case oi one partner becoming insane
is not confined to his fellow-partners. A dissolution may
be sought and obtained on behalf of the lunatic partner
himself ; and this may be done either by his committee in
lunacy under the Lunacy Act, or, where he has not been
found lunatic by inquisition, by an action brought in his
name in the Chancery Division by another person as his
next friend. In the latter case, the Court may, if it thinks
fit, direct an application to be made in Lunacy before
finally disposing of the cause. 8 But the enlarged powers
given to the judge in Lunacy by sect. 116 of the Lunacy
1 Harrison v. Tentiaiit (1856) 21 Beav. 482.
- Jennings v. Buddflnj (1856) 3 K. & J. 78 ; and see per Cotton,
L.J., 13 Oh. Div. at p. 65.
J Jones v. Lloyd (1874) L. R. 18 Eq. 265, 43 L. J. Ch. 826.
dissolution.
GROUNDS OF DISSOLUTION. 97
Act, 1890, may now make it unnecessary and undesirable Part I.
to resort to the Chancery Division. Sect. 35.
It is rather difficult to fix the point at which acts of a What conduct
of a partner is
partner tending to shake the credit of the firm and the ground for
other partner's confidence in him become sufficient ground
for demanding a dissolution. The fact that a particular
partner's continuance in the firm is injurious to its credit
and custom is not of itself ground for a dissolution where
it cannot be imputed to that partner's own wilful miscon-
duct. In a case where one partner had been insane for a time,
and while insane had attempted suicide, this was held not to
be a cause for dissolution, although it was strongly urged that
the credit of the firm could not be preserved if he remained
in it. 1 On the other hand, conduct of a partner in the
business carried on by the firm and its predecessors, though
not in the actual business of the existing firm, which was
calculated to destroy mutual confidence among the partners,
has been held sufficient ground for a dissolution. 3
Actual malversation of one partner in the partnership
affairs, such as failing to account for sums received, 3 is
ground for a dissolution ; so is a state of hostility between
the partners which has become chronic and renders mutual
confidence impossible, as where they have habitually charged
one another, 4 or one partner has habitually charged another,
with gross misconduct in the partnership affairs.
In Atwood v. Maude 6 Lord Cairns said : —
" It is evident . . . that in every partnership . . . such
1 Anon. (1855-6) 2 K. & J. 441, 452. Qii. is this now the law ?
2 Harrison v. Tennant (1856) 21 Beav. 482.
3 C'heesman v. Price (1865) 35 Beav. 142.
* Baxter v. West (1860) 1 Dr. & Sm. 173.
» Watney v. Wells (1861) 30 Beav. 56 ; Leary v. Shout (1864) 33
Beav. 582.
6 L. R. 3 Ob. at p. 373 (1868).
P. H
98
PARTNERSHIP ACT, 1890.
Part I, a state of feeling may arise and exist between the partners
Sect. 35. as to render it impossible that the partnership can continue
with advantage to either; " and he added that, when it is
admitted that this state of feeling does in fact exist, it
becomes immaterial by whom a judicial dissolution of the
partnership is sought. If this dictum had been accepted
to its full extent, in the absence of positive authority,
clause (d) of the section now under consideration might,
perhaps, have assumed a broader and simpler form. The
Act, however, is clearly intended to confirm the existing
practice of the Court, and wider language might have been
taken to confer some new power.
Dissolution by order of the Court takes effect as from
the date of the judgment, unless ordered on the ground
of a specific breach of duty giving the other member or
members a right to dissolve the partnership, in which case
alone it may relate back to that event. 1
An arbitration clause including all matters in difference
empowers the arbitrator to decide whether the partnership
shall be dissolved and to award a dissolution. 3
Rights of
persons deal-
ing with firm
against ap-
parent mem-
bers of firm.
36. — (1-) Where a person deals with a firm
after a change in its constitution he is entitled
to treat all apparent members of the old firm
as still being members of the firm until he has
notice of the change. 3
(•2.) An advertisement in the London Gazette
as to a firm whose principal place of business is
in England or Wales, in the Edinburgh Gazette
1 Lyon v. Turddcll (1881) 17 Cli. Div. 529, 50 L. J. Ch. 571.
- Vnwdmj v. Simpson [1896] 1 Ch. 166, 65 L. J. Ch. 369
' Op. 1 . 0. A. 2(U.
LIABILITIES AFTER DISSOLUTION. 99
as to a firm whose principal place of business is Part i.
in Scotland, and in the Dublin Gazette as to a Sect 36 '
firm whose principal place of business is in
Ireland, shall be notice as to persons who had
not dealings with the firm before the date of the
dissolution or change so advertised.
(3.) The estate of a partner who dies, or who
becomes bankrupt, or of a partner who, not
having been known to the person dealing with
the firm to be a partner, retires from the firm,
is not liable for partnership debts contracted
after the date of the death, bankruptcy, or
retirement respectively. l
Illustrations.
1. A. and B., partners in trade, agree to dissolve the part-
nership, and execute a deed for that purpose, declaring the
partnership dissolved as from the 1st of January ; but they
do not discontinue the business of the firm or give notice of
the dissolution. On the 1st of February A. indorses a bill in
the partnership name to C, who is not aware of the dissolution.
The firm is liable on the bill. 3
2. A bill is drawn on a firm in its usual name of the M.
Company, and accepted by an authorised agent. A. was
formerly a partner in the firm, but not to the knowledge of
B., the holder of the bill, and ceased to be so before the date
of the bill. B. cannot sue A. upon the bill. 3
1 Costs incurred in an action authorised by the firm before disso-
lution of the partnership are not affected by this sub-sect., for they
are within the obligation of the original retainer so long as it has not
been determined : Court v. Berlin [1897] 2 Q. B. 396, 66 L. J. Q. B.
714, C. A.
2 Ex parte Robinson (1833) 3 D. & Ch. at p. 388.
3 Carter v. Wludky (1830) 1 B. & Ad. U, 35 B. B. 199.
H 2
100
PARTNERSHIP ACT, 1890.
Part I.
Sect. 36.
3. A. is a partner with other persons in a bank. A. dies,
and the survivors continue the business under the same firm.
Afterwards the firm becomes insolvent. A.'s estate is liable
to customers of the bank for balances due to them at A.'s
death, so far as they still remain due, and for other partner-
ship liabilities incurred before A.'s death ■} but not for any
debts contracted or liabilities incurred by the firm towards
customers after A.'s death. 2
In the case of liabilities of the firm which have arisen after
A.'s death, it makes no difference that at the time when the
partnership liability arose the customer believed A. to be still
living and a member of the firm. 3
Sub-sect. 2 does not, of course, exclude the effect of notice
in fact by any other means. Even as regards old customers,
notice in fact, once proved, is sufficient, and "it matters
not by what means, for the Partnership Act, 1890, does
not require, nor has it ever been held that any particular
formality must be observed," 4 or, if observed, has any
special virtue.
Eight of
partners to
notify dis-
solution.
37. On the dissolution of a partnership or
retirement of a partner any partner may pub-
licly notify the same, and may require the
other partner or partners to concur for that
purpose in all necessary or proper acts, if any,
1 Dcmpw* v. Xohle (1816) 1 Mer. 52!), 15 R. R. 151 ; Sleeeh's Vtrne
(1816) 1 M.m-. at p. 539, 15 R. R. 155 ; Clayton's ('«.*• (1816) at p. 572,
15 R. R. 161.
■ Brice's Cits,- (1816) 1 Mer. 622, 15 R. R. 171.
3 Houlton's Case (1816) 1 Mer. 616, 15 R. R. 16!). The judgment
itself in this case is not reported; but it appeals by the marginal
note and the context that it followed Brice's Case. The authority of
Houlton's disc is not affected by anything in the Act : Friend v.
Ynung [181)7] 2 Oh. 421, 428, 66 L. J. t'h. 7:37.
1 Lindley, 2150.
RIGHTS AFTER DISSOLUTION. 101
which cannot be done without his or their Parti,
concurrence. sect. »7.
In Troughton v. Hunter 1 it appeared to be the practice
of the London Gazette Office not to insert a notice of
dissolution unless signed by all the partners ; and the
defendant, who had refused to sign a notice, was decreed
to do all things necessary for procuring notice of the dis-
solution to be inserted in the Gazette. A retiring partner
may be ordered to sign a notice of dissolution for insertion
in the Gazette, even if no other specific relief is claimed. 3
38. After the dissolution of a partnership continuing
the authority of each partner to bind the firm, partner/for
and the other rights and obligations of the Shgup.
partners, continue notwithstanding the disso-
lution so far as may be necessary to wind up
the affairs of the partnership, and to complete
transactions begun but unfinished at the time
of the dissolution, 3 but not otherwise.
Provided that the firm is in no case bound
by the acts of a partner who has become
bankrupt, 4 but this proviso does not affect the
liability of any person who has after the bank-
ruptcy represented himself or knowingly suffered
himself to be represented as a partner of the
bankrupt.
1 18 Beav. 470 (1854).
2 Hendry v. Turner (1886) 32 Cli. D. 355, 55 L. J. Ch. 562.
3 Lyon v. Haynes (1843) 5 M. & Ur. 504, 541.
4 Bankruptcy . relates back to the completion of the act of
bankruptcy on which a receiving order is made : Bankruptcy Act,
1883, s. 43.
102 PARTNERSHIP ACT, 1890.
Part I.
Sect. 38.
Illustrations.
1. A. and B. are partners. A. becomes bankrupt. B. gives
acceptances of the firm as security for an existing partner-
ship debt to C, who knows of A.'s bankruptcy. C. indorses
the bills for value to D., who does not know of the bankruptcy.
D. is entitled to rank as a creditor of the firm for the amount
of the bills. 1
2. A. and B. are partners. A. becomes bankrupt. B.
continues to carry on the trade of the firm, and pays partner-
ship moneys into a bank to meet current bills of the firm.
The bank is entitled to this money as against A.'s trustee
in bankruptcy. 2
3. A. and B. are partners in trade. A. becomes bankrupt.
The solvent partner, B., but not other persons claiming through
him by representation or assignment, may, notwithstanding
the dissolution of the partnership wrought by A.'s bankruptcy,
sell any of the partnership goods to pay the debts of the firm, 3
and the purchaser will be entitled to the entire property in
such goods as against A.'s trustee in bankruptcy.
4. A. and B., sharebrokers in partnership, buy certain rail-
way shares. Before the shares are paid for they dissolve
partnership. Either of them may pledge the shares to the
bankers of the firm to raise the purchase-money, and may
authorise the bankers to sell the shares to indemnify
themselves. 6
5. A. and B. having been partners in a business, dissolve
partnership, and A. takes over the business and property of
the firm. If A. gives negotiable instruments in the name of
the old firm, then (subject to the rights of creditors of the
1 Ex parte Robinson (1833") 3 Dva. & Ch. 376, Coop. t. Broinjh. 162,
38 R. R. 39.
2 Womlbrithjc v. Sicann (1833) 4 B. & Ad. 633, 38 R. R. 337.
3 Fra.vr v. Kershaw (1856) -2 K. & J. 496. The authority to sell
is " personal to him in his capacity as partner: " p. 501.
4 ./'o.i; v. Hanbiiry (1776) C'owp. 445.
5 Hutchart v. Ih-ester (185.V 4 T>. M. G. 54i\
BIGHTS AFTER DISSOLUTION. 103
firm) B. is not bound thereby, 1 unless he has specially Parti,
authorised the continued use of the name for that purpose. 2 sect. 38.
6. Partnership articles provide that, before each division of
profits, interest shall be credited to both partners on the amount
of capital standing to the credit of their respective accounts.
This alone does not authorise the allowance of interest, in the
event of a dissolution, for the interval between the dissolution
and the final settlement of the partnership accounts. 3
7. A., B. and C. are partners. A. and B. commit acts of
bankruptcy, and afterwards indorse in the name of the firm
a bill belonging to the partnership. The indorsee acquires no
property in the bill. 4
8. A. and B. are partners. C. is a creditor of the firm ; A.,
having committed an act of bankruptcy to the knowledge of
C., 5 pays C.'s debt. This is an unauthorised payment as
against the firm, and if the firm afterwards becomes bankrupt,
C. must repay the money to the trustee of the joint estate. 6
'J. A. and B. are partners. A. commits an act of bank-
ruptcy, and afterwards accepts a bill in the name of the firm
for his own private purposes, which comes into the hands of a
holder in good faith and for value. B. is liable on the bill, as
A. and B. were ostensibly partners with the assent of B. when
the acceptance was given. 7
10. [A. and B. being partners, draw a bill payable to the
order of the firm. They dissolve partnership, and A. indorses
the bill in the name of the firm, but for his own purposes and
without B.'s knowledge, to C, who knows of the dissolution of
the firm, but does not know that A.'s indorsement is not for a
partnership purpose. B. is liable on the indorsement. 8 ]
1 Heath v. Sanson, (1832) 4 B. & Ad. 172, 38 R. R 237.
2 Smith v. Winter (1838J 4M.&W. 454.
3 Barfield v. Loughborough (1872) L. R. 8 (Jh. 1, 42 L. J. Oh. 179.
4 Thomason v. Frere (1808) 10 East, 418, 10 R. R. 341.
5 If C. had not notice of the act of bankruptcy, he would be
protected by sect. 49 (a) of the Bankruptcy Act, 1883.
6 Gravenv. Mmondson (1830) 6 Bing. 734, 31 R. R. 529.
? Lacy v. Woolcott (1823) 2 D. & R. 458.
8 Lewis v. Reilly (1841) 1 Q. B. 349 : " It is perhaps doing no
104 PARTNERSHIP ACT, 1890.
Part I. 11. [A., B. and C. are partners in a woollen mill. A. dies,
Sect. 38. and B. and C. continue the business. D., the owner of the
mill, distrains for arrears of. rent which were partly due in
the lifetime of A. B. and C. agree with D. that he shall
take the partnership fixtures and machinery in satisfaction
of the rent, and re-let them to B. and C, the transaction
being in fact a mortgage. This does not affect A.'s interest
in the fixtures and goods comprised in the conveyance, and
D. is not entitled to the entire property in them as against
A.'s executors. 1 ]
12. A. and B. are partners. A. files a liquidation petition,
and a receiver of his property is appointed. B. is still entitled
to get in the partnership assets, and to use for that purpose
the name of the trustee in A.'s bankruptcy, on giving him
an indemnity. 2
On this subject the language of the Indian Contract
Act (s. 263) is more general. It says :
"After a dissolution of partnership, the rights and
obligations of the partners continue in all things necessary
for winding up the business of the partnership."
And Lord Eldon spoke more than once of a partnership
violence to language to say that the partnership could not be dissolved
as to this bill, so as to prevent it from being indorsed by either
defendant in the name of the firm," Lord Denmnn, C.J., at p. 351.
But it is difficult to admit the correctness of the decision : see
Lindley, 225, 226. The earlier case of Smith v. Whiter (1838) 4
M. & W. 454 (not cited in Lewis v. Rcilhi), assumes that authority in
fact must be shown for such a use of the partnership name even for
the purpose of liquidating the affairs of the firm.
1 Buckley v. liorhr (1851) 6 Ex. 164, 20 L. J. Ex. 114. This
decision is not consistent with the general current of authorities, and
is probably wrong. It is expressly dissented from by Lord Lindley
(Lindley, p. 351), who further states that it was disapproved in an
unreported case by James, L..T.
' Ex part r Owen (1884) 13 <). B. ])iv. 113, 53 L. J. q. B. 863.
RIGHTS AFTER DISSOLUTION. 105
after dissolution as being in one sense not dissolved until Part I.
the affairs of the firm are wound up. 1 Sect. 38.
But Lord Lindley has shown i that a more guarded
statement is desirable. He points out that the strongest
•case on the subject is (with the doubtful exception of
Leivls v. ReiUy, Illust, 10, above) Butchart v. Dresser
(lllust. 4) ; and this decided at most " that in the event of
a dissolution it is competent for one partner to dispose of
the partnership assets for partnership purposes." Paulus
incidentally mentions the rule as existing in some such
limited form in the Roman law : —
" Si vivo Titio negotia eius administrare coepi, inter-
mittere mortuo eo non debeo ; nova tamen inchoare necesse
mihi non est, vetere explicare ac conservare necessarium
est; ut accidit, cum alter ex sociis mortuns est." 3
The present section puts an end to any doubt on the
matter in England by declaring the law in the form
approved by Lord Lindley.
39. On the dissolution of a partnership Eights of
every partner is entitled, as against the other application of
, „ t 11 1 • ■ partnership
partners m the firm, and all persons claiming property.
through them in respect of their interests as
partners, to have the property of the partner-
ship applied in payment of the debts and
liabilities of the firm, and to have the surplus
assets after such payment applied in payment
of what may be due to the partners respec-
tively after deducting what may be due from
1 1 Swanst. 508 : 2 Russ. 337, 342, 18 R. R. 132 (1818).
2 Lindley, 227, 228.
3 D. 3, 5, de negot. gest. 21, § 2.
10(5 PARTNERSHIP ACT, 1890.
Part i. them as partners to the firm ; and for that
sect. 39. purpose any partner or his representatives may
on the termination of the partnership apply to
the Court to wind up the business and affairs of
the firm. 1
Iluisiraliuiis.
1. One of the partners in a firm becomes bankrupt. All
debts due from him to the firm must be satisfied out of his
share of the partnership property before recourse is had to
such share for payment of debts due either to any of the
partners on his private account or to any other person. 2
2. A creditor of one partner in a firm on a separate account
unconnected with the partnership takes his share in the part-
nership property in execution. He is entitled at most to the
amount of that partner's interest after deducting everything
then due from him to the other partners on the partnership
account ; 3 but in such deduction debts due to all or any of the
other partners otherwise ihan on the partnership account are
not to be included. 4
;!. A. and B. are partners, having equal shares in their
business. A. dies, and B. continues to employ his share of the
partnership capital in the business without authority, thereby
becoming liable to A. 's estate for a moiety of the profits. 5 A.'s
estate is entitled not only to a moiety of the partnership's
1 Compare I. C. A. 265. There is no absolute right to have a
receiver appointed after dissolution : but the Court will generally
appoint a receiver on the application of a partner. See Pint v.
Roncoroni [1MI2] 1 Ch. 633, (il L. J. Oh. 218. As to the principles of
apportionment where a partner dies after the account day of the firm
and before the account has been made up, see Hunter v. Bowling
[1895] 2 Ch. 223, 04 L. J. Ch. 713.
• Croft v. Pike (1733) 3 P. Wins. 180. See below, pp. 147 sqq., as
to the administration of partnership estates.
3 /;*««( v. M/>(1749) 1 Yes. Sen. 2:59, 242; per Lord Manstield,
Pox v. Jlunhury (1776) Cowp. at p. 449.
4 Skipp v. Httnrood (1747) 2 Swunst. "iMi.
6 See sect. 42, below.
107
PAllTNEKti LIEN.
property, but to a lien upon the other moiety for the share of part I.
profits due to the estate. 1 Sect~39 ~
4. A. and B. are partners. The partnership is dissolved by
agreement, and the agreement provides that B. shall take over
the business and property of the firm and pay its debts. B.
takes possession of the property and continues the business,
but does not pay all the debts, and some time afterwards
mortgages a policy of assurance, part of the assets of the late
partnership, to C, who knows the facts above mentioned, and
also knows that the policy mortgaged to him is part of the
partnership assets. A. or his representatives may require
any part of the partnership property remaining in the hands
of B. to be applied in payment of the unpaid debts of
the firm, but they have no such right as to the policy mort-
gaged to C. Here C. claims through B. not as partner but
as sole owner, and is not bound to see to the application of
his money. 2
The general rule has been thus stated: that "on the Nature of the
dissolution of the partnership all the property belonging or quasi-lien.
to the partnership shall be sold, and the proceeds of the
sale, after discharging all the partnership debts and
liabilities, shall be divided among the partners according
to their respective shares in the capital." 3
The right of each partner to control within certain limits
the disposition of the partnership property is a rather
peculiar one. It exists during the partnership, and when
accounts are taken and the partners' shares ascertained
from time to time, its existence is assumed, but it comes
into full play only in the event of a dissolution. It belongs
to a class of rights known as equitable liens, which have
nothing to do with possession, and must therefore be care-
fully distinguished from the possessory liens which are
1 Stoekeii v. Dawson (1845) 9 Beav. 239.
2 Re Langmead's Trusts (1855) 20 Beav. 20, 7 1). M. G. 353.
3 Darby v. Darby (1856) 3 Drew, at p. 503.
106 PARTNERSHIP ACT, 1S90.
Part I. familiar in several heads of the Common Law. The
Sect. 39. possessory lien of an unpaid vendor, factor, or the like, is
a mere right to hold the goods of another man until he
makes a certain payment ; it does not, as a rule, carry
with it the right of dealing with the goods in any way. 1
Equitable lien, on the other hand, is nothing else than the
right to have a specific portion of property dealt with in a
particular way for the satisfaction of specific claims.
Against whom The lien, or quasi-lien, 3 as it is sometimes called, of each
partner on the partnership property is available against
the other partners, and against all persons claiming an
interest in a partner's share as such. We have already
seen that an assignee of a partner's share takes it subject
to all claims of the other partners (sect. 31). But a pur-
chaser or pledgee of partnership property from a partner,
unless he has notice of an actual want of authority to
dispose of it, is entitled to assume that his money will be
properly applied for partnership purposes, and may rely
on the disposing partner's receipt as a complete discharge. 3
Likewise the individual partners cannot require a judgment
creditor of the firm to pursue his remedy against the partner-
ship property before having recourse to the separate property
of the partners ; for, as we have seen above (pp. 41, 4"2),
English law does not recognise the firm as having rights or
liabilities distinct from those of the individual partners,
and a judgment against a firm of partners is nothing else
than a judgment against the partners as joint debtors, and
is treated like any other judgment of that nature. There
1 On the still unsullied question of an unpaid vendor's rights in
this respect, see Page v. Cotrasjee Eduljee (]S(i6) L. R, 1 P. 0. 145.
2 25 lieav, 280 (1858}.
5 Lamjnmtil's 7 nut* (1855) 20 l'.eav. 20, 7 D. M. G. 353; see
lllust. 4, last. pa^'e.
PARTNERS LIEN. 109
seems to be nothing to alter this in the Eule of Court now Part I.
in force as to judgments against partners in the name of Sect. 39.
the firm. 1 Creditors, on the other hand, have no specific
rights against any property of the firm except such as they
may acquire by actually taking it in execution. 2
During a partnership the lien in question attaches to all Applies only
partnerhip property for the time being. Upon a dissolution property at ^
it extends only to the partnership property existing as f„ t *n ° f diss °"
such at the date of dissolution. Therefore, if one of two
partners dies, and the executors of the deceased partner
allow the survivor to continue the business of the firm,
there will be no lien in their favour on property acquired
by him in this course of business in addition to or in sub-
stitution for partnership property ; and in the event of the
surviving partner's bankruptcy, goods brought into the
business by him will belong to his creditors in the new
business, not to the creditors of the former partnership. 3
It is probable, however, that a surviving partner who
insisted on carrying on the business against the will of the
deceased partner's representatives would be estopped from
showing that property in his hands and employed in the
business was not part of the actual partnership assets. 4
1 Kules of the Supreme Court, Order XLVIIIa. r. 8 (No. 648 h),
pp. 138-141, below.
■ Stocken v. Dawson (1845) 9 Beav. 239.
3 Payne v. Hornby (1858) 25 Beav. 280, 286-7.
4 This is given as the general rule in Dixon on Partnership, 493,
and the rule in Payne v. Hornby as the exception ; and a dictum of
Lord Hardwicke's is there cited (West v. Skip (1749) 1 Ves. Sen. at
p. 244), that the lien extends to stock brought in after the determina-
tion of the partnership. But this dictum relies on an old case of
Buclcnall v. Roiston (1709), Pre. Oh. 285, which was a case not of
partnership at all, but of a continuing pledge of stock in trade :
from which the partner's lien is expressly distinguished in Payne v.
Hornby.
110
PARTNERSHIP ACT, 1890.
Part I.
Sect. 39.
General power
of Court not
excluded by
clause as to
dividing
assets.
Disposal of
goodwill on
dissolution.
Rights of
partners as to
goodwill.
Eights and
duties of
vendor and
purchaser of
goodwill.
The presence in partnership articles of a clause providing
for division of the assets on a dissolution does not exclude
the general power of the Court to direct a sale of the
business as a going concern and appoint a receiver and
manager '
Unit's tis to tin' disposal of Goodwill.
The Act does not make any express provision for dis-
posing of the goodwill on the dissolution of a firm.
Probably this is due to the consideration that the rules
of law relating to goodwill are not confined to cases where
a business has been carried on in partnership, and there-
fore do not belong to the law of partnership in any exact
sense. Nevertheless the rules have been settled chiefly
by decisions in partnership cases, and the question of
goodwill is one of those which ought always to be con-
sidered and provided for in the formation of a partnership,
and constantly has to be considered on its dissolution,
whether provided for or not. Hence it seems proper to
retain here the attempt to formulate these rules which was
made in this work in its previous form of an experi-
mental digest. The following statement is believed to
be substantially correct : —
On the dissolution of a partnership every partner has
a right, in the absence of any agreement to the contrary,
to have the goodwill of the business sold for the common
benefit of all the partners. -
Where the goodwill of a business, whether carried on in
partnership or not, is sold, the rights and duties of the
vendor and purchaser are determined by the following
1 Ttujlor v. Nmtc (1888) ;?!) Cli. D. 53S, 57 L. J. Cli. 1044.
' Lindley, 445. In other words, the goodwill, and therefore also
the lirm-iinme, is part of the partnership assets : Icni v. Walker
(187D) 10 Cli. Div. 436, 440, 48 L. J. Ch. 073.
DISPOSAL OF GOODWILL ON DISSOLUTION. Ill
rules in the absence of any special agreement excluding or Part I.
varying their effect : — Sect. 39.
(a.) The purchaser alone may represent himself as
continuing or succeeding to the business of the vendor. 1
(6.) The vendor may nevertheless carry on a similar
business in competition with the purchaser, but not under
the name of the former firm, nor so as to represent himself
as continuing or succeeding to the same business. 1
(c.) The vendor may publicly advertise his business, but
may not canvass the customers of the former firm. 3
(d.) The sale carries the exclusive right to use the name
of the former firm, 8 subject to this qualification, that the
purchaser may use the vendor's name only " so long and
so far as he does not by so doing expose him to any
liability." 4 The purchaser has the right to trade as the
vendor's successor, but not to hold out the vendor as still
in the business and personally answerable. A purchaser
of "assets" without any restrictive terms, or a partner
retaining the " assets " on dissolution, is entitled to the
1 Churton v. Douglas (1859) Johns. 174. But the vendor's wife,
having separate estate, cannot he restrained from carrying on a
■competing business on her own account and in her own name : Smith
v. Hancock [1894] 2 Ch. 377, 63 L. J. Ch. 477, C. A. (diss.
Kay, L.J.).
' Trego v. Hunt [1896] A. C. 7, 65 L. J. Ch. 1, where the House of
Lords restored the authority of Labouchere v. Dawson (1872) L. R. 13
Eq. 322, against the Court of Appeal. A partner who has been expelled
under a provision in the articles is not restrained from carrying on
the same business on his own account, or soliciting customers of the
old' firm : Dawson v. Beeson (1882)22 Ch. Div. 504.
5 Levy v. Walker (1879) 10 Ch. Div. 436, 48 L. J. Ch. 273 ; Be
David and Matthews [1999] 1 Ch. 378, 168 L. J. Ch. 185. -
4 Thynne v. Shove (1890) 45 Ch. Div. 577, 582, 59 L. J. Ch. 509.
5 45 Ch. Div. at p. 580; Ohurlon v. Douglas (1859) Johns, at
p. 190.
112 PARTNERSHIP ACT, 1890.
Part I. goodwill, with its incidental rights. 1 The effect of special
Sect. 39. terms, if any, must be considered in each case as they
occur. 2 On a dissolution without any special provision
naming or including goodwill, or restricting the use of the
firm-name, either partner may use the old name, provided
he does not thereby expose a former partner to any sub-
stantial risk. Whether there is such risk in the particular
case is a question of fact depending on the nature of the
business and other circumstances. 3
Illustrations.
1. A., B. and C. have carried on business in partnership
under the firm of A. and Co. A. retires from the firm on the
terms of the other partners purchasing from him his interest
in the business and goodwill, and D. is taken in as a new
partner. B., C. and D. continue the business under the firm
of " B., 0. and D.. late A. and Co." A. may set up a similar
business of his own next door to them, but not under the
firm of A. and Co. 4
2. One of several persons carrying on business in partner-
ship having died, the affairs of the partnership are wound
up by the Court, and a sale of the partnership assets, including
the goodwill, is directed. The goodwill must not be valued
on the supposition that any surviving partner, if he does not
himself become the purchaser, can be restrained from setting
up the same kind of business on his own account ; B for
"no Court can prevent the late partners from engaging in
the same business, and therefore the sale cannot proceed
upon the same principles as if a Court could prevent their
so engaging." 6
1 Jenniiujs v. Jainimts [1898] 1 Oh. 378, 07 L. J. Cli. 190.
- See Pearson v. Pearson (,15<S4) 27 Ch. Div. 14.3, 54 L. J. Ch. 32,
not overruled on this point.
■' Burvhdl v. IVihk [1900] 1 Cli. 551, (59 L. J. Cli. 314, A. C.
I Chiuion v. lhmjlas (ISM) Johns. 174.
5 Hall v. Harrows (18U3) 4 1). J. S. at p. 159.
II Lord Eldon's decree in Cook v, Collingridijc (1825), given in 27
INCIDENTS OF GOODWILL. 113
The term goodwill is a commercial rather than a legal Part I.
one, nor is its use confined to the affairs of partnership Sect. 39.
firms* It is well understood in business, hut not easy to ^jdentTol:
define. It has been described as " the benefit arising from " goodwill."
connexion and reputation," 1 which includes " the proba-
bility of the old customers going to the new firm " which
has acquired the business : 3 but this last phrase is not of
itself adequate. 3 That which the purchaser of a goodwill
actually acquires, as between himself and his vendor, is the
right to carry on the same business under the old name
with such addition or qualification, if any, as may be
necessary for the protection of the vendor from liability or
exposure to litigation under the doctrine of "holding
out "), 4 and to represent himself to former customers as
the successor to that business. Unless there is an express
agreement to the contrary, the vendor remains free to
compete with the purchaser in the same line of business ; 5 -
and he may publish to the world, by advertisements or
otherwise, the fact that he carries on such business. But he
must not specially solicit the customers of the old firm to
transfer their custom to him ; 6 and he must not use the
lieav. 456, 459, 23 R. R. 767. The declarations and directions there
inserted contain an exposition of the nature and legal incidents of
goodwill which is still of high authority. See now on the position of
a purchaser of goodwill, and the principles of valuation, per Romer, J.,
in Be David and Matthews [1899] 1 Ch; 378, 68 L. J. Oh. 185.
1 Lindley, 441.
2 Lord Romilly, M.R., Labouchere v. Dawson (1872) L. R. 13 Eq.
at p. 324 ; and see Llewellyn v. Rutherford (1875) L. R. 10 C. P. 456,
44 L. J. 0. P. 281 ; Wedderburn v.. Wedderbum (1855-6) 22 Beav.
at p. 104.
3 Per Lord Macnaghten, Trego v. Hunt [1896] A. C. 7, 23.
4 Burchellv. Wilde, note ', p. 112, above.
1 Ohurton v. Douglas (1859) Johns. 174.
6 Trego v. Hunt [1896] A. C. 7, 65 L. J. Ch. 1, reversing the decision
of the C. A. [1895] 1 Ch. 462, 64 L. J. 392, and overruling Pearson v.
P. I
114
PARTNERSHIP ACT, 1890.
Part I.
Sect. 39.
Goodwill
does not
" survive.'
name of the old firm so as to represent that he is continuing,
not merely a similar business, but the same business. " You
are not to say, I am the owner of that which I have sold." l
Probably the purchasers of the business might successfully
object even to his carrying on a competing business in
his own name alone, if that name had been used as the
name of the late firm and had become part of its goodwill. 3
It was formerly supposed that on the death of a partner
in a firm the goodwill mirvired — that is, that the surviving
partners were entitled to the whole benefit of it without any
express agreement to that effect. But it is now perfectly
settled that this is not so. 3 Surviving or continuing
partners may in various ways have the benefit of the good-
will, and an intention to let them have it may be shown by
conduct as well as words. " When a partner retires from
a firm, assenting to or acquiescing in the retention by the
other partners of possession of the old place of business
and the future conduct of the business by them under the
old name, the goodwill remains with the latter as of
course." * But this really amounts to saying that in such
a case the goodwill ceases to have any separate value. The
Pearson (1884) 27 Ch. D. 145, on the point of principle. The dissent-
ing judgment of Lindley, L.J., in the last-named case was therefore
correct. An express provision in the articles that an outgoing partner
may start a similar business in the neighbourhood is merely declaratory,
and does not exclude the rule against soliciting old customers :
Oillingham v. Beddow [1900] 2 Ch. 242, 69 L. J. Ch. 527.
1 Churton v. Douglas (1859) Johns, at p. 193.
2 Churton v. Douglas (1859) Johns, at pp. 197, 198. As to the
right to the exclusive use of a trade name, see pp. 22 — 25, above.
3 The notion of the goodwill surviving is expressly contradicted,
for instance, in Smith v. Everett (1859) 27 Beav. 446. For the history
of the modern law, see the judgment of Romer, J., Re Daiid and
Matthews [1899] 1 Ch. 378, 382.
< Mvm-ndex v. Holt (1888) 128 U. S. 514, 522.
INCIDENTS OF GOODWILL. 115
retiring partner has nothing left that he could give except Part I.
an undertaking not to compete with the firm ; and this, as Sect. 39.
we have seen, is not implied even in an express assignment
of goodwill. 1
It seems that in the business of solicitors goodwill in the
ordinary sense hardly exists. 3 The same reasons might
apply to any other business depending on personal and
confidential relations, and wholly or mainly independent
of local connexion or the resorting of customers to a
particular place. 3
It also seems that after a dissolution each of the partners Eight of
in the dissolved firm or his representatives may, in the restrain use of
absence of any agreement to the contrary, restrain any j^me 6 P
other partner or his representatives from carrying on the
same business under the partnership name until the affairs
of the firm have been wound up and the partnership
property disposed of. 4
There is now sufficient authority for accepting this as a
necessary consequence of the principles above stated. 5 If
any partner who may require it has a right to have the
1 Cp. Lindley, 446.
2 See Austen v. Boys (1858) 2 De G. & J. 626, 635 ; Arundell v.
Bell (C. A. 1883) 31 W. R. 477 ; but in Barchell v. Wilde (note 3 ,
p. 112, above) it is assumed throughout that it does exist in some
sense and for some purposes.
3 As in the case of commission merchants : Steuart v. Gladstone
<1879) 10 Ch. Div. 626, 657 ; cp. Fair v. Pearce (1818) 3 Madd. 74,
18 R. R. 196.
4 Be David and Mattliews [1899] 1 Ch. 378 ; Lindley, 447.
■> As to Banks v. Gibson (1865) 34 Beav. 566, which raises a diffi-
culty, that was a case, "according to the view of the judge who
decided it, where co-partners had agreed on dissolution to divide the
assets, including the goodwill, so as to allow either partner to use
the name of the partnership firm " : per Romer, J., Re David and
Matthews [1899] 1 Ch. 378, 384. See also per Lindley, M.R., in
Burchell v. Wilde [1900] 1 Ch. at p. 563, 69 L. J. Ch. 314. '
12
116
Purt I.
Sect. 39.
Apportion-
ment of
premium
where part-
nership pre-
maturely
dissolved.
PARTNERSHIP ACT, 1890.
goodwill sold for the common benefit, it cannot be that
each partner is also entitled to do that which would deprive
the goodwill of all saleable value. There is express
authority to show that while a liquidation of partnership
affairs is pending one partner must not use the name or
property of the partnership to carry on business on his own
sole account, since it is the duty of every partner to do
nothing to prejudice the saleable value of the partnership
property until the sale. 1 This question does not in any case
affect the independent right of a late partner who is living
and not bankrupt to restrain the successor to the business
from continuing the use of his name therein so as to expose
him to the risk of being sued as an apparent partner. 3
After the affairs of a dissolved firm are wound up every
partner is free to use the firm-name in the absence of
agreement to the contrary, 3 provided that he does not
expose any late partner to liability. 4
40. Where one partner has paid a premium
to another on entering into a partnership for a
fixed term, and the partnership is dissolved
before the expiration of that term otherwise
than by the death of a partner, 5 the Court ma)"
order the repayment of the premium, or of
such part thereof as it thinks just, having
regard to the terms of the partnership contract
1 Timer v. Major (1862) 3 Gift'. 442.
1 Scott v. Rowland (1872) 20 V\'. R. 508 ; see p. 112, above.
3 Per James, L.J., Levy v. Walker (1879) 10 Ch. Div. 445, 48 L. J.
Ch. 273.
* Burchell v. Wilde [1900] 1 Ch. 551, 69 L. J. Ch. 314, C. A.
6 Limlley, 584; Whwcitp v. Hughes (1871) L. R. 6 C. P. 78, 40
L. J. U. P. 104.
REPAYMENT OE PREMIUM. 117
and to the length of time during which the Parti,
partnership has continued ; unless Sect 40<
(a) the dissolution is, in the judgment of
the Court, wholly or chiefly due to the
misconduct of the partner who paid the
premium, or
(b) the partnership has been dissolved by
an agreement containing no provision for
a return of any part of the premium.
Illustrations.
1. A. and B. enter into a partnership for five years, on the
terms of A. paying a premium of £1,050 to B., £500 imme-
diately, and the rest by instalments. In the second year of
the partnership term, and before the whole of the premium has
.been paid, A. is adjudicated a bankrupt on the petition of B.
B. is not entitled to any further, payments on account of the
premium, the partnership having been determined by his own
act, and he may retain only so much of the part already paid
„to him as the Court thinks just. 1
2. A. and B. enter into a partnership for a term of years, A.
paying a premium to B. Long before the expiration of the
±erm B. becomes bankrupc.
It has been held that B.'s estate is entitled to the whole
premium, because A. bought the right of becoming his
partner subject to the chance of the partnership being prer
maturely determined by ordinary contingencies, such as death
or bankruptcy. 2
And also that B.'s estate must return or give credit for a
1 Hamil v. Stokes (1817) 4 Pri. 161 ; and tetter in Dan. 20, 18
E. E. 690.
" Akhurst v. Jackson (1818) 1 Swanst. 85. No stress is laid on the
fact that at the commencement of the partnership A. knew that B.
was in embarrassed circumstances, which is the only point on which
the case can be distinguished from Freelancl v. Stansfeld; see Ahoood
r. Maude (1868) L. E. 3 Ch. at p. 372.
118 PARTNERSHIP ACT, 1890.
Part I. proportionate part of the premium, as the bankruptcy which
Sect. 40. determined the partnership was B.'s own act. 1
3. A. and B. enter into partnership for fourteen years, B.
paying a premium to A. In the course of the same year
differences arise, there is a quarrel in which, in the opinion of
the Court, A. and B. are both to blame, A. excludes B. from
the business and premises of the partnership and B. sues A.
for a dissolution of partnership and return of the premium.
A. is entitled to retain only so much of the premium as bears
the same proportion to its whole amount as the time for which
the partnership has actually lasted bears to the whole term
first agreed upon. 2
4. A. and B. are partners for a term of fourteen years, B.
having paid a premium of £600 to A. At the end of seven
years of the term B. gives notice of dissolution to A., under
a power contained in the partnership articles, on the ground
of A.'s neglect of the business ; and B. claims to have the
premium apportioned on the principle of the last illustration.
B. is not entitled to the return of half the premium, but only
to such allowance as the Court thinks proper on a general
estimate of the case. 3
5. A. and B. enter into partnership for fourteen years, A.
paying a premium calculated on two years' purchase of the
net profits of the business. The partnership is dissolved
within two years in consequence of mutual disagreements.
No part of the premium is repayable. 4
1 Freeland v. Stansfeld (1852-4) 2 Urn. & G. 479. This is probably
the correct view.
2 Bury v. Allen (1844-5) 1 Coll. 589 ; the proportion to be
returned or allowed for was calculated on the same principle in
Astle v. Wright (1856) 23 Beav. 77; Pease v. Hewitt (1862) 31
Beav. 22 ; Wilson v. Johnstone (1873) L. B. 16 Eq. 606, 42 L. J.
Ch. 668.
3 Bulloch v. Crockett (1862) 3 Giff. 507. There not quite seven
years of the term had in fact elapsed, but the Court allowed only
JE100 to the partner who had paid £600 premium. The same rule
of unlimited discretion as to the amount to be returned was acted
upon in Freelmid v. Stansfeld, note (1).
4 Aireij v. Borhmu (1861) 29 Beav. 620.
REPAYMENT OF PREMIUM. 119
6. A. takes B. into partnership for seven years, knowing Part I.
him to be inexperienced in the business, and requires him on sect. 40.
that account to pay a premium. After two years A. calls on
B. to dissolve the partnership on the ground of B.'s incom-
petence, and B. sues A. for a dissolution and the return of an
apportioned part of the premium. B. is entitled to the return
of such part of the premium as bears the same proportion to
the whole sum which the unexpired period of the term of
seven years bears to the whole term. 1
7. A. and B. enter into partnership for fourteen years, A.
paying a premium. In the fourth year disputes arise, and a
dissolution of the partnership by consent is gazetted. No
agreement is made at the time of dissolution for the return of
any part of the premium. A. cannot afterwards claim to have
any part of it returned. 3
The terms of the Act leave a wide discretion to the Eule as given
Court, and the earlier decisions cannot be safely treated as Maude.
obsolete. At the same time its language appears to be
founded on the judgment in Atwood v. Maude, 3 still the
latest case on the subject in a Court of Appeal. And it
may perhaps be concluded that now, in accordance with
that case, the proportionate part to be returned is, in the
absence of special reasons to the contrary, a sum bearing
the same proportion to the whole premium as the unexpired
part of the partnership term originally contracted for bears
to the whole term. Conversely, where the premium pay-
able by a partner in fault is still unpaid, payment of it
may be ordered. 4 It is now understood that the terms of
dissolution are a matter of judicial discretion for the judge
i Atwood v. Maude (1868) L. E. 3 Ch. 369.
2 Lee v. Page (1861) 30 L. J. Ch. 857.
3 L. K. 3 Ch.369 (1868). In Wilson v. Johnstone (1873) L. R. 16
Eq. 606, 42 L. J. Ch. 668, Wiokens, V.-C, proposed a somewhat
different rule, which it is now unnecessary to consider.
4 Bluck v. Capstick (1879) 12 Ch. D..863, 48 L. J. Ch. 766.
120
PARTNERSHIP ACT, 1890.
Part I. who hears the cause, and that his decision will not be
Sect. 40. interfered with by the Court of Appeal except for strong
reasons. 1
This kind of relief must be sought at the same time
with the dissolution of partnership itself. After decree,
such an application is admissible only on special grounds. 2
Arbitrators under a common arbitration clause in
partnership articles (not expressly providing for reference
of any question as to return of premium) have power to
award a return of the premium or part thereof as part of
the terms of a dissolution. 3
Eights where
partnership
dissolved for
fraud or
misrepresen-
tation.
41. Where a partnership contract is rescinded
on the ground of the fraud or misrepresentation
of one of the parties thereto, the party entitled
to rescind is, without prejudice to any other
right, entitled —
(a) to a lien on, or right of retention of, the
surplus of the partnership assets, after
satisfying the partnership liabilities, for
any sum of money paid by him for the
purchase of a share in the partnership and
for any capital contributed by him, and is*
(b) to stand in the place of the creditors of
the firm for any payments made by him in
respect of the partnership liabilities, and
(c) to be indemnified by the person guilty of
1 Lyon v. Timlddl (1881) 17 Cli. Div. 529. 50 L. J. Ch. 571.
2 Edmonds v. Robinson (1885) 29 Ch. D. 170, 54 L. J. Ch. 586.
■'• Iklfidd v. Bourne [1894] 1 Ch. 521, 63 L. J. Ch. 104.
'' Some such words as " also entitled" appear to have dropped out
at the ond of this clause, unless " is " was retained by a clerical error.
PROFITS AFTER DISSOLUTION. 121
the fraud or making the representation Part i.
against all the debts and liabilities of the Sect ' 41 -
firm. 1
This enactment hardly needs explanation. The principles
on which contracts may be set aside for fraud or misrepre-
sentation belong to the general law of contract, and can
be adequately considered only in that connexion. It is
proper to bear in mind that the contract of partnership
is one of those which are said to be uberrima fidei.
Refraining from active falsehood in word or deed is not
enough ; the utmost good faith is required. And this
■duty " extends to persons negotiating for a partnership,
but between whom no partnership as yet exists." s The
most extensive applications of the principle, however, have
been in the questions arising out of the formation of com-
panies. The wholesome development of the law in this
■direction has been, as I venture to think, unhappily checked
-by the decision of the House of Lords in Derry v. Peek
{1889, 14 App. Ca. 337), and the remedy provided in con-
sequence of that decision by the Directors' Liability Act,
1890 (53 & 54 Vict. c. 64), is far from being satisfactory.
42 — (1.) Where any member of a firm has Bight of out-
v ' J going partner
died or otherwise ceased to be a partner, and in certain
cases to
the surviving or continuing partners carry on share profits
. made after
the business of the firm with its capital or dissolution,
assets without any final settlement of accounts
1 On this section generally, cp. Lindley, 484 sqq.; Myeockv. Beatson
.(1879) 13 Ch. D. 384, 49 L. J. Ch. 127 ; as to clause (c) : Newbicjging
v. Adam (1886) 34 Ch. Div. 582, 56 L. J. Ch. 275.
' Lindley, 314, 325, and see the present writer's " Principles of
Contract," 6th ed. pp. 529, 530.
122 PARTNERSHIP ACT, 1890.
Part i. as between the firm and the outgoing partner or
sect. 42. hi s estate, then, 1 in the absence of any agree-
ment to the contrary, the outgoing partner or
his estate is entitled at the option of himself
or his representatives to such share of the
profits made since the dissolution as the Court
may find to be attributable to the use of his
share of the partnership assets, or to interest at.
the rate of five per cent, per annum on the
amount of his share of the partnership assets. 2
(2.) Provided that where by the partnership,
contract an option is given to surviving or con-
tinuing partners to purchase the interest of a
deceased or outgoing partner, and that option
is duly exercised, the estate of the deceased
partner, or the outgoing partner or his estate,,
as the case may be, is not entitled to any
1 Perhaps a clerical error for " there ; " but the sense is un-
affected.
2 Per Lord Cairns, I>e v. Foster (1874) L. R. 7 H. L. at p. 329 ;.
Yates v. Finn (1880) 13 Cli. D. 839, 49 L. J. Ch. 188. How far the
profits made since the dissolution are attributable to the outgoing,
partner's capital is a question to be determined with regard to the
nature of the business, the amount of capital from time to time
employed in it, the skill and industry of each partner taking part in.
it, and the conduct of the parties generally . See per Turner, L.J., in
Simpson v. Cliapmnn (1853) 4 D. M. G. at pp. 171, 172, following and
approving Wigram, V.-C.'s exposition in Jl'illett v. Blanford (1841) 1
Ha. 253, 266, 272. There is no fixed rule that the profits are divisible-
in the same manner as if the partnership had not ce.ised : Brown v.
Ik TaM (1 82 1) Jac. at p. 296 ; 23 R. R. 68. Indeed, the presumption,
appears to be in favour of apportioning profits to capital without
regard to the proportions in which they were divisible during the-
partnership : Ytttrx v. Finn (18SO) 13 Ch. D. at p. 843.
PHOFITS AFTER BISSOLVTIOX. 123
further or other share of profits ; but if any Part i.
partner assuming to act in exercise of the sect. 42.
. option does not in all material respects comply
with the terms thereof, he is liable to account
under the foregoing provisions of this section.
Illustrations to subs. (1).
1. A., B. and C. are partners in a manufacture of machinery.
A. is entitled to three-eighths of the partnership property and
profits. A. becomes bankrupt, and B. and C. continue the
business without paying out A.'s share of the partnership
assets or settling accounts with his estate. A.'s estate is
entitled to three-eighths of the profits made in the business
.from the date of his bankruptcy until the final liquidation of
the partnership affairs. 1
2. A. and B. are partners. The partnership is dissolved
by consent, and it is agreed that the assets and business of
the firm shall be sold by auction. A. nevertheless continues
to carry on the business on the partnership premises, and with
the partnership property and capital, and upon his own account,
ile must account to B. for the profits thus made. 2
3. A. and B. trade in partnership as merchants. A. dies,
and B. continues the business with A.'s capital. B. must
account to A.'s estate for the profits made since A.'s death,
but the Court will make in B.'s favour such allowance as
it thinks just for his skill and trouble in managing the
business. 3
4. A., B. and C. are merchants trading in partnership
under articles which provide that upon the death of any
partner the goodwill of the business shall belong exclusively
to the survivors. A. dies, and B. and C. pay or account for
1 Crawshay v. Collins (1826) 2 Russ. 325, 342-345, 347, 26 R. R. 83.
2 Turner v. Major (1862) 3 Gift'. 442.
3 Brown v. Be Tastet (1821) Jac. 284, 299, 23 R. R. 59 ; cp. Yates
v. *'mmi(1880) 13 Ch. D. 839, 49 L. J. Oh. 188.
124 PARTNERSHIP A CT, 1890.
Parti. interest to his legatees, upon the estimated value of his share
Sect. 42. at the time of his death, but do not pay out the capital
amount thereof. The firm afterwards make large profits, but
the nature of the business and the circumstances at the time
of A.'s death were such that at that time any attempt to
realise the assets of the firm or the amount of A.'s share
would have been highly imprudent, and would have endangered
the solvency of the firm, so that A.'s share in the partnership
assets if then ascertained by a forced winding-up would have
been of no value whatever. Under these circumstances the
profits made in the business alter A.'s death are chiefly attri-
butable, not to A.'s share of capital, but to the goodwill and
reputation of the business and the skill of the surviving
partners, and A.'s legatees have no claim to participate in such
profits to any greater extent than the amounts already paid or
accounted for to them in respect of interest on the estimated
value of A.'s share. 1
5. The facts are as in the last illustration, except that the
articles do not provide that the goodwill shall belong to
surviving partners. The deceased partner's estate is entitled
to share in the profits made since his death and attributable
to goodwill in a proportion corresponding to his interest in
the value of the goodwill itself as a partnership asset. The
evidence of experts in the particular business will be admitted,
if necessary, to ascertain how much of the profits was
attributable to goodwill. 3
6. A. and B. are partners, sharing profits equally, in a
business in which A. finds the capital and B. the skill. B.
dies before there has been time for his skill in the business to
create a goodwill of appreciable value for the firm. A. con-
tinues the business of the firm with the assistance of other
skilled persons. B.'s estate is [probably] not entitled to any
share of the profits made alter B.'s death.
7. The other facts being as in the last illustration, B. dies
after his skill in the business has created a connexion and
WciMerburn v. Width rlmni (1855-li) 22 Beav. 84, 123, 124.
Sw 22 Beav. at pp. 104, 112, 122 (1855-6).
PROFITS AFTER DISSOLUTION. 125
goodwill for the firm. B.'s estate is [probably] entitled to a Part I.
share of the profits made after B.'s death. 1 Sect 48
Illustrations to siib-s. (2).
1. A., B. and C. are partners, under articles which provide
that on the death of A., B. and C, or the survivor of them,
may continue the business in partnership with A.'s represen-
tatives or nominees, taking at the same time an increased
share in the profits ; and that, in that case, B. and 0. or the
survivor of them shall enter into new articles of partnership,
pay out in a specified manner the value of the part of A.'s
interest taken over, and give certain securities to A.'s repre-
sentatives. B. dies, then A. dies. C. carries on the business
without pursuing the provisions of the articles as to entering
into new articles, or paying out the value of the part of A.'s
interest which he is entitled to acquire, or giving security.
C. must account to A.'s estate for subsequent profits. 3
2. A., B. and C. are partners under articles which provide
that in case of the death of any partner the value of his share
shall be ascertained as therein provided, with an allowance in
lieu of profits at the rate of 5 per cent, per annum upon his
share of the capital, and that the moneys found to be due to
his executors shall be taken in full for the purchase of his
share, and shall be paid out in a certain manner by instal-
ments extending over two years. A. dies. B. and C. ascertain
the amount of his share, and pay interest thereon to his repre-
sentatives, but, acting in good faith for the benefit of the
persons interested, they do not pay out the capital within the
two years. This delay in making the complete payment out
is not a material non-compliance with the terms of the option
of purchase, and B. and C. cannot be called upon to account
to A.'s estate for profits subsequent to A.'s death. 3
The reader who is already acquainted with the cases Claims
now cited by way of illustration wiil perceive that several yivino- OT
1 These last two cases are given by Wigram, V.-C, in his judgment e
in IVillett v. Blcmford (1841) 1 Ha. at p. 271.
2 WilUtt v. Blcmford (1841) 1 Ha. 253, 264.
3 Vyse v. Foster (1874) L. E. 7 H. L. 318, 44 L. J. Ch. 37.
126
PARTNERSHIP ACT, 1890.
Part I.
Sect. 42.
partners as
executors or
trustees.
These dis-
tinguished by . ■,
further illus- t0 De
trations.
of them have been designedly simplified in statement. It
often happens that a partner in a firm disposing of his
interest in it by will, and not desiring the affairs of the
firm to be exposed to the interference of strangers, makes
his fellow partners or some of them his executors or
trustees, or includes one or more of them among the
persons appointed to those offices. If, having done this,
he dies while the partnership is subsisting, there may
arise at the same time, and either wholly or in part in the
same persons, two kinds of duties in respect of the testator's
interest which are in many ways alike in their nature and
incidents, but must be nevertheless kept distinct. There
is the duty of the surviving partners as partners towards
the deceased partner's estate ; and of this we have just
spoken. There is also the duty of the same persons, or
some of them, as executors or trustees towards the persons
beneficially interested in that estate; and this is deter-
mined by principles which are really independent of the
law of partnership.
The nature of these complications and the distinctions
observed may be exhibited by some further
illustrations.
(«.) A. and B. are partners. A. dies, having appointed B.
his sole executor, and B. carries on the trade with A.'s capital.
Here B. is answerable to A.'s estate as partner, and A.'s
executor, if he were a person other than B. himself, would
be the proper person to enforce that liability. B. is also
answerable as executor to the persons beneficially interested in
A.'s estate for the improper employment of his testator's assets.
(ft.) A., a trader, appoints B. his executor and dies. B.
enters into partnership with C. and D. in the same trade,
and employs the testator's assets in the partnership business.
B. gives an indemnity to C. and D. against the claim of A.'s
residuary legatees. Here C. and D. are jointly liable with
PROFITS AFTER DISSOLUTION. 127
B. to A.'s residuary legatees, not as partners, but as having part I.
knowingly made themselves parties to the breach of trust "^sect. 42.
■committed by B. 1
(c.) A. being in partnership with B. and C. appoints B. his
executor and dies. B. and 0. continue to employ A.'s capital
in the business. B. is liable as executor to account for the
profits received by himself from the use of A.'s capital, but
not for the whole profits received therefrom by the firm. 3 It
is not certain to what extent B. would be liable if B. and C.
were sued together. 3
(d.) A. and B. are partners in trade. A. dies, having
appointed C. and D. his executors, and authorised them to
continue his capital in the trade for a limited time. On the
expiration of that time C. and D. do not withdraw their
testator's capital, but leave it as a loan to the firm, B. and E.,
the then members of the firm, knowing the limit of the
authority given by A.'s will, and knowing the fund to belong
to A.'s estate. B. and E. are not liable to render to the
persons interested under A.'s will an account of profits since
the time when A.'s capital ought to have been finally with-
drawn, inasmuch as C. and D. themselves are liable to A.'s
legatees only to make good the amount of the capital with
interest. 4
(«.) If the other facts are as in the last illustration, but B.,
one of A.'s executors, is himself a member of the firm, C. and
D., the other executors, are still not accountable for any share
of profits. 5 B. cannot be charged as executor with a greater
share of profits in respect of his testator's capital than he has
actually received, 6 and it is doubtful whether he can be charged
with profits at all. 5
1 Flockton v. Running (1868) L. R. 8 Ch. 323, n.
s Per Lord Cairns, L. R. 7 H. L. 334 (1874).
3 Lindley, 589, 598.
4 Stroud v. Owyer (1860) 28 Beav. 130.
5 Vyse v. Foster (1874) L. R. 7 H. L. 318, 44 L. J. Ch. 37 ; see per
Lord Selborne, L. R. 7 H. L. at p. 346.
6 Jones v. Foxall (1852) 15 Beav. 388 ; per James, L.J., Vyse v.
Foster (1872) L. R. 8 Ch. at pp. 333, 334.
128
PARTNERSHIP ACT, 1890.
Part I. (/.) A., B. and C. are partners in a bank which is carried
Sect. 42~ on upon the known private credit of the partners, and with
little or no capital. A. dies, having appointed C. and D. his
executors. At the time of A.'s death his debt to the bank on
his private account exceeds his share in the assets. B. and C.
take D. into partnership, and continue the business without
paying out A.'s share. C. and D. are not accountable as
executors for any share of the profits since A.'s death, as A.
really left no capital in the business to which such profits
could be attributed, and D. entered the partnership and shared
the profits not as executor, but on his own private account.
In like manner B., C. and D. are [probably] not accountable
to A.'s estate as partm rs. 1
Claims must In these "mixed and difficult" cases, as Lord Lindley
be distinct ....-,...
and against calls them,- it is important for persons seeking to assert
FnpropeT" 68 tlleir r] ^ ht to an accouat of profits to make up their
capacity. minds distinctly in what capacity and on the score of what
duty they will charge the surviving partners or any of
them. If they proceed against executors as such for what
is really a partnership liability, if any, and without bringing
all the members of the firm before the Court, failure will
be the inevitable result. 3 In a single case where one
surviving partner out of several was held solely liable for
the profits made by the employment of a deceased partner's
capital by the firm, there was in fact only a sub-partnership
between this survivor and the deceased : and it was there-
fore held that the other members of the principal firm
were under no duty to the estate of one who was not their
1 Simpson v. Chapman (1S53) 4 Y>. II. G. 154.
2 Lindlt-y, 589.
J Si'o Simpmin v. Clia/mian (18531 4 J). M. G. 154 ; !';/»> v. Foster
(1874) L. U. 7 H. L. 318, 44 L. J. Cli. 37 ; Travis v. Milne (1851) 9
Ha. at p. 149.
CLAIMS AGAINST PARTNERS AS TRUSTEES. 129
partner at all, and were not necessary or proper parties to Part I.
be sued. 1 sect. 42.
Again, the right, where it exists, is an alternative right and must be
. for profits
to interest on the capital improperly retained in the busi- alone, or for
, j.j^j.1 Ci ii-i t interest alone,
ness or to an account of the profits made by its use ; and
one or other of these alternatives must be distinctly chosen.
A double claim for both profits and interest is of course
inadmissible, and it has been laid down that a mixed claim
is equally so. " If relief can be obtained on the footing
of an account of profits, it must be an account of profits
and nothing else ; " a claim for profits as to part of the
time over which the dealing extends, and interest as to
other part, or for profits against some or one of the
surviving partners, and interest against others, cannot be
allowed. 2
It is a question, however, whether success in asserting Account of
claims of this kind is not in practice little more profitable dissolution
than failure ; for an account of profits after dissolution u ^ le y S ln
has seldom or never been known to produce any real benefit
to the parties who obtained it. 3
Where interest is given, it is generally simple interest What interest
at 5 per cent. It does not appear that a partner as such glTen '
is ever charged with compound interest in these cases. A
trustee-partner may in his quality of trustee be charged
with compound interest at 5 per cent., if the retention of
the fund in the hands of the firm, even as a loan, was a
distinct and specific breach of trust.*
1 Brawn v. De Tastet (1821) Jac. 284, 23 R. R. 59 ; see p. 80, above.
2 Per Lord Cairns, Vyse v. Foster (1874) L. R. 7 H. L. at p. 336.
J Lindley, 5th ed. 536, note (o) : " The writer is not aware of any
instance in which such a judgment has bten vvurked out and has
resulted beneficially to the person in whose favour it was made."
4 As in Jones v. Foxall (1852) 15 Beav. 388.
P. K
130
Part I,
Sect. 43.
Betiring or
deceased
partner's
share to be
a debt.
Surviving
partner not a
trustee.
Statute of
Limitations.
Rule for dis-
tribution of
assets on final
settlement
of accounts.
PARTNERSHIP ACT, 181K).
43. Subject to any agreement between the
partners, the amount clue from surviving or
continuing partners to an outgoing partner or
the representatives of a deceased partner in
respect of the outgoing or deceased partner's
share is a debt accruing at the date of the
dissolution or death.
A surviving partner has sometimes been said to be a
trustee for the deceased partner's representatives in respect
of his interest in the partnership ; but this is a meta-
phorical and inaccurate expression. The claim of the
representatives against the surviving partner is in the
nature of a simple contract debt, and is subject to the
Statute of Limitations, which runs from the deceased
partner's death. The receipt of a particular debt due to
the firm after six years have elapsed from that date does
not revive the right to demand a general account. 1 Such
is the practical effect of the law, now settled for more than
twenty years, which is declared by this section.
The mode of ascertaining an outgoing or deceased
partner's share must of course depend on the partner-
ship agreement. Very commonly the last annual account
is taken as fixing the share. 2
44. In settling accounts between the partners
after a dissolution of partnership, the following
rules shall , subject to any agreement, be observed :
(a.) Losses, including losses and deficiencies
1 Knox. v. ffi/e (1871 --2) L. E. 5 H. L. 656, 42 L. J. Ch. 234, see
]h.t Lord Westbuvy.
■ As to the construction of such clauses, Hunter v. Dmoling [1893]
3 Cli. 212, IHL.J. Oh. 017, V. A.
DISTRIBUTION OF ASSETS. 131
of capital, 1 shall be paid first out of profits, fart i.
next out of capital, and lastly, if necessary, Seot 44,
by trie partners individually in the propor-
tion in which they were entitled to share
profits :
(b.) The assets of the firm including the sums,
if any, contributed by the partners to make
up losses or deficiencies of capital, shall
be applied in the following manner and
order :
1. In paying the debts and liabilities of
the firm to persons who are not
partners therein : ,
2. In paying to each partner rateably
what is due from the firm to him for
advances as distinguished from capital :
3. In paying to each partner rateably
what is due from the firm to him in
respect of capital :
4. The ultimate residue, if any, shall
be divided among the partners in
the proportion in which profits are
divisible. 2
1 Nowell v. Nowell (1869) L. R. 7 Eq. 538 ; Whitcomb v. Converse
(1875) 119 Mass. 38. In other words, money due from the firm to
a partner in respect of capital contributed, not being a distinct
advance, is differently treated from money due for advances only in
the one point of ranking after it. In itself it is a partnership debt,
to be made up by contribution, if the assets are insufficient, in the
same way as other partnership losses.
2 Sub-sect, (b) is almost verbally from Lindley, 5th ed. 402. Com-
pare the form of order fully stated in the judgment of the Judicial
K2
132 PARTNERSHIP ACT, 1890.
Parti. Partners cannot, of course, escape by any agreement
Sect. 44. among themselves from the necessity of paying the external
debts of the firm in full before they divide profits or even
repay advances as between themselves. But they may
make any agreement they please as to the proportions in
which, as between themselves, partners shall be bound to
contribute and entitled to be recouped. The rules given
in this section are only rules of administration founded on
the usual course of business, and expressing what is fairly
presumed to be the intention of the partners, but if any
different intention is shown in a particular case by the
terms of the partnership articles or otherwise, that intention
so shown must prevail.
Supplemental.
Definitions 45. In this Act, unless the contrary intention
of " court "
and " busi- appears, —
The expression " Court " includes every Court
and judge having jurisdiction in the case.
Committee, Binney v. Mittrie (1886) 12 App. Ca. 160, 165. Where
partnership assets are administered by the Court in an action, debts
from the firm to a partner : Potter v. Jackson (1880) 13 Ch. D. 845,
49 L. J. Ch. 232, and also what is due to him in respect of capital :
Ross v. White [1894] 3 Ch. 326, C. A., are payable out of the assets
before the costs of the action. Before any partner can take his costs
out of the assets, he must make good what is due to the assets (per
Lindley, L.J. [1894] 3 Ch. at p. 336). A partner's share of the assets
is only what remains after payment of joint debts. If, therefore, a
partner has given a charge on his separate real estate as security for
joint debts, and at his death the joint estate is solvent, there is really
no case of dispute between different persons claiming through the
deceased, and Locke King's Act (now officially named the Real
KM ate Charges Act, 1854) does not apply : Re Ritson [1899] 1 Ch.
liS, 68 L. J. Ch. 77, C. A.
SUPPLEMENTAL. 133
The expression "business" includes every Fart i.
trade, occupation, or profession. Sect 48 -
46. The rules of equity and of common law saving for
applicable to partnership shall continue in force equity and
, j. ,i ■ . , , -.1 ,i common law,
except so tar as they are inconsistent with the
express provisions of this Act.
As to this section, see the Preface, p. vii., above.
47. (1-) In the application of this Act to Provision as
a j.i n p to bankruptcy
bcotland the bankruptcy of a firm or of an in Scotland.
individual shall mean sequestration under the
Bankruptcy (Scotland) Acts, and also in the
case of an individual the issue against him of a
decree of cessio bonorum.
(2.) Nothing in this Act shall alter the rules
of the law of Scotland relating to the bank-
ruptcy of a firm or of the individual partners
thereof.
48. The Acts mentioned in the schedule to Eepeai.
this Act are hereby repealed to the extent men-
tioned in the third column of that schedule.
49. This Act shall come into operation on oommence-
the first day of January one thousand eight
hundred and ninety-one.
50. This Act may be cited as the Partner- short title.
ship Act, 1890.
134
Part I.
Sect. 50
Section 48.
Session and
Chapter.
1!) k 20 Vict.
e. 60.
Ill k 20 Vict.
c. 97.
28 & 29 Vict.
c. si;.
FAliTSEliHUll' ACT, 1890.
SCHEDULE.
Enactments Repealed.
Title or Short Title.
The Mercantile Law Amendment
(Scotland) Act, 1*56.
The Mercantile Law Amendment
Act, 1856.
An Act to amend the law of part-
nership.
Extent of Repeal.
Section seven. 1
Section four. 1
The whole Act.-
1 Superseded by .sect. 18, above.
2 Superseded by sect. 2, above.
135
PART II.
PROCEDURE AND ADMINISTRATION.
CHAPTER I.
Procedure in Actions by and against Partners.
The Rules of Court, and the rules established by Part II.
decisions in bankruptcy, and now partly declared in the ap ' '
Bankruptcy Act, deal with various points exclusively or ^h 618 -^!,
specially relating to partnership affairs, and therefore the Act.
important for persons concerned therein, either as parties
or as legal advisers, to have some knowledge of. These
are not touched by the present Act, and it will still be
convenient to give some account of them, though it is not
possible to make a work of this kind a complete guide to
the practice under the Rules.
The previous Rules of Court applicable to actions by and
against firms were superseded in June, 1891, by Order
XLVIIIa., which in part amends and in part consoli-
dates their substance. The terms of the Order are as
follows : —
Actions by and against Firms and Persons carrying
on Business in Names other than their own.
(1.) Any two or more persons claiming or
being liable as co-partners and carrying on
136 PROCEDURE AND ADMINISTRATION.
Part ii. business within the jurisdiction l may sue or be
sued in the name of the respective firms, if
any, of which such persons were co-partners at
the time of the accruing of the cause of action ;
and any party to an action may in such case
apply by summons to a judge for a statement
of the names and addresses of the persons who
were, at the time of the accruing of the cause
of action, co-partners in any such firm, to be
furnished in such manner, and verified on oath
or otherwise, as the judge may direct.
(2.) When a writ is sued out by partners in
the name of their firm, the plaintiffs or their
solicitors shall, on demand in writing by or on
behalf of any defendant, forthwith declare in
writing the names and places of residence of
all the persons constituting the firm on whose
behalf the action is brought. And if the
plaintiffs or their solicitors shall fail to comply
with such demand, all proceedings in the action
may, upon an application for that purpose,
be stayed upon such terms as the Court or a
judge may direct. And when the names of
the partners are so declared, the action shall
proceed in the same manner and the same
consequences in all respects shall follow as if
1 This applies to a foreign or colonial firm, the members of which
are resident out of the jurisdiction ; the test is whether they carry on
business within the jurisdiction, not where they reside : Worcester
City, etc. Hanking Co. v. Firbank [1894] 1 Q. B. 784, 63 L. J. Q. B.
542.
ACTIONS BY AND AGAINST FIRMS. 137
they had been named as the plaintiffs in the Fartn
writ. But all the proceedings shall, neverthe-
less, continue in the name of the firm.
(3.) Where persons are sued as partners in
the name of their firm under Rule (1), the writ
shall be served either upon any one or more
of the partners or at the principal place, within
the jurisdiction, of the business of the partner-
ship upon any person having at the time of
service the control or management of the part-
nership business there ; and, subject to these
rules, such service shall be deemed good service
upon the firm so sued, whether any of the
members thereof are out of the jurisdiction or
not, and no leave to issue a writ against them
shall be necessary : 1 provided that in the case
of a co-partnership which has been dissolved
to the knowledge of the plaintiff before the com-
mencement of the action, the writ of summons
shall be served upon every person within the
jurisdiction sought to be made liable. 2
(4.) Where a writ is issued against a firm,
and is served as directed by Eule (3), every
1 This rule does not extend the substantial jurisdiction of English
Courts against foreigners resident outside the jurisdiction. See St.
Gobain, &c. Go. v. Hoyermann's Agency [1893] 2 Q. B. 96, 62 L. J. Q. B.
485, U. A., approving Russell v. Cambeforte (1889) 23 Q. B. Div. 526,
58 L. J. Q. B. 498. But a learned writer in the Law Quarterly
Review, x. 197, thinks these authorities hardly reconcilable with
Worcester Gity, cfcc. Banking Co. v. Firbank (last note).
- Wigram v. Cox, Sons, Buckley & Go. [1894] 1 Q. B. 792, 63 L. J.
Q. B. 751.
Chap. I.
13 8 WOCKDCRE AND AIMlXIXTJiATIOX.
Part ii. person upon whom it is served shall be in-
formed by notice in writing given at the time
of such service whether he is served as a partner
or as a person having the control or manage-
ment of the partnership business, or in both
characters. In default of such notice, the
person served shall be deemed to be served as
a partner.
(5.) Where persons are sued as partners in
the name of their firm, they shall appear indi-
vidually in their own names ; but all subse-
quent proceedings shall, nevertheless, continue
in the name of the firm. 1
(6.) Where a writ is served under Rule (3)
upon a person having the control or manage-
ment of the partnership business, no appear-
ance by him shall be necessary unless he is a
member of the firm sued.
(7.) Any person served as a partner under
Ride (3) may enter an appearance under
1 Even if one of the partneis sued in the firm-name dies after writ
and appearance, the survivor must not put in a merely personal
defence : he must defend in the name and on behalf of the firm :
Ellis v. Wathxov [1899] 1 Q. B. 714, 68 L. J. Q. B. 604, C. A. In
an action against a firm, the appearance of one out of several partners
is sufficient to ground proceedings under Ord. XIV. r. 1 : Lysaght v.
Clnii- [1891] 1 Q. B. :m-1, ">36 ; and service, under Ord. IX. r. 6 (see
now Ord. XLVIIIa. r. 3), on one of two foreigners trading in
partnership in England was held good : lb. A solicitor employed by
the managing partner of a firm to defend an action brought against
the firm has authority to enter an appearance in the names of each
of the partners individually : Tomliwmii v. Hruiuhurith [1896] 1 Q. B.
386, c.-, I,. ,1. il U. ;;os, (\ A.
ACTIONS BY AND AGAINST FlUMS. 139
protest, denying that he is a partner, but such Part n
Chap. I
appearance shall not preclude the plaintiff from
otherwise serving the firm and obtaining judg-
ment against the firm in default of appearance
if no partner has entered an appearance in the
ordinary form.
(8.) Where a judgment or order is against
a firm, execution may issue :
(a.) Against any property of the partnership
within the jurisdiction ;
(b.) Against any person who has appeared in
his own name under Eule (5) or (6), or
who has admitted on the pleadings that
he is, or who has been adjudged to be a
partner ;
(c) Against any person who has been indi-
vidually served, as a partner, with the writ
of summons, and has failed to appear. 1
If the party who has obtained judgment or an
order claims to be entitled to issue execution
against any other person as being a member of
the firm, he may apply to the Court or a judge
for leave so to do ; and the Court or judge
may give such leave if the liability be not
disputed, or if such liability be disputed may
order that the liability of such person be tried
and determined in any manner in which any
1 Rule 8 applies only where there has been no dissolution, or
none to the knowledge of the plaintiff: per Cave, J. [1894] 1 Q. B.
at p. 795.
14 PROCEDURE AND ADMINISTRATION.
Part ii. issue or question in an action may be tried
Chap. I
and determined. 1 But except as against any
property of the partnership, a judgment against
a firm shall not render liable, release, or other-
wise affect any member thereof who was out of
the jurisdiction when the writ was issued, and
who has not appeared to the writ unless he
has been made a party to the action under
Order XI., or has been served within the juris-
diction after the writ in the action was issued.
(9.) Debts owing from a firm carrying on
business within the jurisdiction may be attached
under Order XLV., although one or more
members of such firm may be resident abroad :
provided that any person having the control or
management of the partnership business or any
member of the firm within the jurisdiction is
served with the garnishee order. An appear-
ance by any member pursuant to an order
shall be a sufficient appearance by the firm.
(10.) The above rules shall apply to actions
between a firm and one or more of its members,
and to actions between firms having one or
more members in common, provided such firm
or firms carry on business within the jurisdic-
tion, but no exection shall be issued in such
actions without leave of the Court or a judge,
1 But the defendant must have been first served with the writ in
accordance with Rule 3 : U'igntm. v. Cox [1894] 1 Q. B. 792, 63 L. J.
Q. B. 751.
ACTION H BY AND AGAINST FIRMS. 141
and on an application for leave to issue such Part n.
rr Chap. I.
execution all such accounts and inquiries may
be directed to be taken and made, and direc-
tions given, as may be just. 1
(11.) Any person carrying on business within
the jurisdiction in a name or style other than
his own name may be sued in such name or
style as if it were a firm-name ; and, so far as
the nature of the case will permit, all rules
relating to proceedings against firms shall
apply. 2
In bankruptcy an order of adjudication cannot be made Adjudication
against a firm in tbe firm-name. It must be made against bankruptcy,
tbe partners individually, 3 and tbeir personal liability to
sucb proceedings cannot be enlarged by previous action
against the firm. A married woman trading separately from
her husband under a firm-name cannot be made bankrupt
on a bankruptcy notice founded on a judgment obtained
against her in the firm-name. 4 Where there is an infant
partner a receiving order cannot be made against the firm,
but it may be made against the firm " other than " the
1 This rule finally removes the doubt whether the firm-name can
be used in actions between a firm and any of its own members, or
between firms having a member in common.
2 This does not apply to a foreigner resident out of the jurisdiction :
Be Bernaks v. New York Herald [1893] 2 Q. B. 97, n., 62 L. J. Q. B.
385 ; cp. St. Oobain v. Hoyermann's Agency [1893] 2 Q. B. 96, 62
L. J. Q. B. 485, C. A. A domiciled Scot resident in Scotland is
a foreigner for this purpose : if he is to be sued in this country he
must be sued under Ord. XI., and not this Order : Maclver v. Burns
[1895] 2 Ch. 630, 64 L. J. Ch. 681, C. A.
3 General Rules of 1886, 264.
* Re Frances Handford & Co. [1899] 1 Q. B. 566, 68 L. J. Q. B. 386,
C. A.
142 PROCEDURE AND ADMINISTRATION.
Part II. infant partner. 1 A creditor who has obtained judgment
'' against the firm, but has not got leave to issue individual
execution under this order, cannot issue a bankruptcy
notice under the Act of 1883 against individual members
, of the firm. 2
Service out of Partnership actions often involve questions as to service
Action! 8 " out of the jurisdiction. Order XI. (revised E. S. C,
Nov. 1893) does not, however, contain any provisions
exclusively or specially relating to such actions.
1 Lovell v. Beauchamp [1894] A. C. 607, 63 L. J. Q. B. 802.
The same rule would seem to hold as to judgments against a firm.
2 Ex parte Ide (1886) 17 Q. B. Div. 755, 55 L. J. Q. B. 484.
BANKRUPTCY PROCEDURE. 143
CHAPTEE II.
Procedure in Bankruptcy against Partners.
1. "Wheke two or more bankruptcy peti- ^'n
tions are presented against the same debtor or consolidation
against ioint debtors, the Court may consolidate ? f P r0M fi-
u " •> ings under
the proceedings, or any of them, on such terms j°intand
as the Court thinks fit." 1 petitions.
Illustration.
A. and B. are partners in trade, A. being the sole managing
partner. C, a creditor of the firm, presents a bankruptcy
petition against A. alone. Before the hearing of this petition
C. presents another petition against A. and B. jointly. The
Court will consolidate the proceedings under the separate
petition with those under the joint petition. 3
2. " Any creditor whose debt is sufficient creditor of
■ii 1 • ii • ■ nrai ma y
to entitle him to present a bankruptcy petition present peti-
against all the partners of a firm may present a one partner.
petition against any one or more partners of
the firm without including the others." 3
3. " Where there are more respondents than court may
one to a petition, the Court may dismiss the tion as to 1_
.... , j. , i .,1 , some respon-
petition as to one or more of them without dents only.
1 Bankruptcy Act, 1883 (46 & 47 Vict. c. 52), s. 106.
- Ex parte Mackenzie (1875) L. E. 20 Eq. 758, 44 L. J. Bky. 117.
3 Bankruptcy Act, 1883 (46 & 47 Vict. c. 52), s. 110.
144
PROCEDURE AND ADMINISTRATION.
Part II.
Chap. II.
One trustee
for property
of partners in
one firm
separately
bankrupt.
Creditor of
firm may
prove in
separate
bankruptcy
for purpose
of voting.
prejudice to the effect of the petition as against
the other or others of them." 1
4. "Where a receiving order has been made
on a bankruptcy petition against or by one
member of a partnership, any other bankruptcy
petition against or by a member of the same
partnership shall be filed in or transferred to
the Court in which the first mentioned petition
is in course of prosecution, and unless the Court
otherwise directs, the same trustee or receiver
shall be appointed as may have been appointed
in respect of the property of the first-mentioned
member of the partnership, and the Court may
give such directions for consolidating the pro-
ceedings under the petitions as it thinks just." 2
5. "If a receiving order is made against
one partner of a firm, any creditor to whom
that partner is indebted jointly with the other
partners of the firm, or any of them, may prove
his debt for the purpose of voting at any
meeting of creditors, and shall be entitled to
vote thereat." 3
1 Bankruptcy Act, 1883 (46 & 47 Vict, c. 52), s. 111.
2 lb. s. 112. When a trustee of the joint estate is duly appointed,
the separate estates also vest in him at once : Ex parte Philps (1874)
L. R. 19 Eq. 2f>(>, 44 L. J. P>ky. 40 ; Re JFaddeU's Contract (1876)
L. B. 2 Cli. II. 17-2, 45 L. J. Oh. 047 ; and see Ebbs v. Boulnois (1875)
L. R. 10 Oh. 47!), 44 L. J. Oh. li!ll. There is jurisdiction to con-
solidate proceedings under separate receiving orders even if made
after n dissolution • Re Abbott [1894] 1 Q. B. 442, 63 L. J. Q. B. 253.
3 Hi. sehed. 1, rule 13. As to the distribution of the estates, see
further, Chap. 3, pars. 1-4, below.
BANKRUPTCY PROCEDURE. 145
6. " (1.) Where one partner of a firm is Partn.
Chap. II.
adjudged bankrupt, a creditor to whom the „— — : —
J ° . . Dividends of
bankrupt is indebted -jointly with the other joint and
separate
partners of the firm, or any of them, shall not properties.
receive any dividend out of the separate pro-
perty of the bankrupt until all the separate
creditors have received the full amount of their
respective debts.
" (2.) Where joint and separate properties
are being administered, dividends of the joint
and separate properties shall, subject to any
order to the contrary that may be made by the
Court on the application of any person in-
terested, 1 be declared together ; and the ex-
penses of and incident to such dividends shall
be fairly apportioned by the trustee between
the joint and separate properties, regard being
had to the work done for, and the benefit
received by each property." 2
7. " Where a member of a partnership is Actions by
adjudged bankrupt, the Court may authorise solvent
the trustee to commence and prosecute any par
action in the names of the trustee and of the
bankrupt's partner ; and any release by such
partner of the debt or demand to which the
action relates shall be void ; but notice of the
application for authority to commence the action
1 See Ex parte Dickin (1875) L. R. 20 Eq. 767, 44 L. J. Bky. 113.
2 Bankruptcy Act, 1883, s. 59.
P. L
146 PROCEDURE AND ADMINISTRATION.
Part ii. shall be given to him, and he may show cause
against it, and on his application the Court
may, if it thinks fit, direct that he shall receive
his proper share of the proceeds of the action,
and if he does not claim any benefit therefrom
he shall be indemnified against costs in respect
thereof as the Court directs." 1
Bankruptcy Act, 1883, s. 113.
ADMINISTRATION OF ESTATES. 147
CHAPTEE III.
Administration of Partnership Estates.
I . In the administration by the High Court Part n.
J Chap. III.
of Justice of the estates of deceased partners — —
x General rule
and of bankrupt and insolvent partners, the of administra-
tion as to
following rules are observed, subject to the joint and
, . „ separate
exceptions mentioned in the two following estate.
paragraphs : —
The partnership property is applied as joint
estate in payment of the debts of the firm, 1
and the separate property of each partner is
applied as separate estate in payment of his
separate debts.
After such payment the surplus, if any, of
the joint estate is applied in payment of the
separate debts of the partners, or the surplus,
if any, of the separate estate is applied in
payment of the debts of the firm.
Illustrations.
1. A. and B. are in partnership. A. dies, and his estate
is administered by the Court. Both A.'s estate and B. are
solvent. Here A.'s separate creditors and the creditors of A.
and B.'s firm may prove their debts against A.'s estate and
be paid out of his assets pari passu and in the same manner.
1 That is, to persons other than partners : see par. 4, p. 158, below.
l2
14 8 PROCEDURE AND ADMINISTRATION.
Part II. The payments thus made to creditors of the firm must then
Chap. III. t, e a i[ 0W ed by B. in account with A.'s estate as payments
made on behalf of the firm, and A.'s estate will be credited
accordingly in ascertaining what is A.'s share of the partnership
property. 1
2. The facts being otherwise as in the last illustration, A.'s
estate is insolvent, and the creditors of the firm proceed to
recover the full amount of their debts from the solvent
partner, B. Here B. will become a creditor of A.'s separate
estate for the amount of the partnership debts paid by B.
beyond the proportion which he ought to have paid under the
partnership contract. 2
3. If B. is also insolvent, the creditors of the firm must
resort in the first instance to the partnership property, and
can only come against so much of the separate property of the
partners as remains after paying their separate creditors
respectively : and the same rule applies if both A. and B. have
died before the administration takes place. 3
4. A. and B. are partners. A. dies, and B. afterwards
becomes bankrupt. M., a creditor of the firm, proves his debt
in B.'s bankruptcy, and receives some dividends which satisfy
it only in pare. A.'s estate is administered by the Court,
and M. proves in that administration for the residue of his
debt. Separate creditors of A. also prove their debts. M.
has no claim upon A.'s estate until all the separate creditors
of A. have been paid. 4
5. A. and B. are partners under articles which provide that
in the event of A.'s death during the partnership, B.'s interest
in the profits shall thenceforth belong to A.'s representatives
B. receiving a sum equivalent to his share of profits for six
months, to be ascertained as therein provided, and the amount
of his capital. A. dies, having appointed B. his executor. B.
carries on the business for some time, and then becomes a
liquidating debtor. The partnership property existing at the
1 Eith/emtii v. Clare (1854) 19 Beav. at p. 116.
- mi
-< lb. at pp. 116, 117.
1 Lothie v. Prichard (1863) 1 D. J. S. 610.
ADMINISTRATION OF ESTATES. 149
date of A.'s death is not converted into A.'s separate property Part II.
by the provisions of the partnership articles, and such pro- Chap, in.
perty, so far as it is still found in B.'s hands at the time
of liquidation, is applicable in the first instance as joint estate
to pay the creditors of the firm. 1
6. A. and B. are partners for a term, A. not having brought
in any capital, but receiving a share of the profits as a working
partner. The partnership deed provides that, if A. dies
during the term, his representatives shall receive only an
apportioned part of his .estimated share in the profits for the
■current half-year. A. dies during the term, and B. afterwards
becomes bankrupt. Here B. takes the partnership property
subject to the right of A.'s estate to be indemnified against
the partnership debts, and the property of the firm of A. and
B., so far as it is found still existing in B.'s hands, must be
first applied to pay the creditors of the firm. 2
7. A., B., C. and D. are partners for a term under articles
which provide that the death of any one of them shall not
dissolve the partnership, but the survivors or survivor shall
carry on the business, and the share of the deceased partner
shall be ascertained and paid out as therein provided. A.
and B. die during the term, and afterwards C. and D. become
liquidating debtors. Here, as the interest of a deceased
partner wholly passes to the survivors on his death under the
special and exceptional provisions of the partnership articles,
the creditors of the original firm of A., B., C. and D. have no
right to have the property of that firm, so far as it is found
still existing in the hands of C. andD., applied in payment
of their debts in preference to the creditors of the new firm
of C. and D.s
This rule lias been repeatedly laid down in its general
form as a well-established one.
1 Ex parte Morley (1873) L. R. 8 Ch. 1U26. Compare Ex parte
Butcher (1880) 13 Ch. Div. 465, » similar case, in which this decision
was followed.
- Ex parte Dear (1876) 1 Ch. Div. 514, 45 L. J. Bky. 22.
•' He Simpson (1874) L. R. 9 Ch. 572. 43 L. J. Bky. 147. This was
a peculiar case.
15 1'ROCEDUIIK AND ADMINISTRATION.
Part II. " Upon a joint bankruptcy or insolvency, the joint estate
cha,v - IIL is the fund primarily liable, and the separate estate is only
doTO the"' 8 brought in in case of a surplus remaining after the separate
rule. creditors have been satisfied out of it." 1
" The joint estate is to be applied in payment of the
joint debts, and the separate estate in payment of the separate
debts, any surplus there may be of either estate being carried
over to the other ; " and this applies to the administration
of estates in Equity as well as in Bankruptcy. 2
" The joint estate must be applied first in payment of
joint creditors, and the separate estate in payment of
separate creditors, and only tbe surplus of each estate is to
be applied in satisfaction of the other class of creditors." 3
And now it is declared by statute in the Bankruptcy
Act, 1883, s. 40, sub-s. 3 :
"In the case of partners the joint estate shall be applicable
in the first instance in payment of their joint debts, and
the separate estate of each partner shall be applicable in
the first instance in payment of his separate debts. If there
is a surplus of the separate estates it shall be dealt with as
part of the joint estate. If there is a surplus of the joint
estate it shall be dealt with as part of the respective
separate estates in proportion to the right and interest of
each partner in the joint estate."'
But this statutory declaration seems not to have
1 Rolfc v. Flower (1866) L. E. 1 P. C. at p. 48.
2 Lodge v. Prirhtnl (1863) 1 D. J. S. at pp. 613, 614, per Turner,
L.J. The Supreme Court of Judicature Act, 1875, s. 10, assimilates
the rules of administration of deceased persons' estates to those " in
force lor the time being under the Law of Bankruptcy with respect
to the estates of persons adjudged bankrupt : " apart from this
enactment, however, the practice was already so settled on the point
now in question.
J Ex ■parte Dear (1876) 1 Oh. Div. at p. 519, per James, L.J. ; Ex
parte Morley (1873) L. 1!. 8 Oh. at p. 1032,
JOINT AND SEPARATE ESTATES. 151
abrogated the power of the Court to consolidate the estates Part II.
if they are " inextricably blended." 1 — — —
The subject was also carefully considered by Lord
Romilly in Ridgway v. Clare. 2 The rules there laid down
by him for the various cases which may occur have been
given above in the form of illustrations.
The Indian Contract Act (s. 262) gives the rule as Euleof
„ ,, Indian Con-
follOWS:— tract Act.
" Where there are joint debts due fromthe partnership,
and also separate debts due from any partner, the partner-
ship property must be applied in the first instance in
payment of the debts of the firm ; and if there is any
surplus, then the share of each partner must be applied
in payment of his separate debts or paid to him. The
separate property of any partner must be applied first in
the payment of his separate debts, and the surplus (if any)
in the payment of the debts of the firm." This section is
general in its terms, and not confined to tbe adminis-
tration of partners' estates by the Court. It seems
intended to cover the doctrine of partners' lien, which
is separately dealt with by the Partnership Act, s. 39,
pp. 105 — 110, above.
The rules of administration as between the creditors of The rule
the firm and the separate creditors of the partners have d3rtfulin
been settled, and adhered to after much hesitation in the principle,
earlier cases, as " a sort of rough code of justice," 3 and as
an empirical way of dealing with a pressing necessity,
rather than as being reasonable in themselves. 4 They
give, in fact, results altogether at variance with the
mercantile system of settling the accounts of a firm, which
1 Ex parte Trotman (1893) 68 L. T. 588, 5 R. 349.
2 19 Beav. Ill (1854).
3 Per James, L.J., Lacey v. Hill (1872) L. E. 8 Ch. at p. 444.
4 " It is extremely difficult to say upon what the rule in bankruptcy
152
PROCEDURE AND ADMINISTRATION.
Part II.
Chap. III.
Mercantile
plan of admi-
nistration.
Law of
Scotland.
proceeds upon the mercantile conception of the firm as a
person distinct from its partners. On the mercantile plan
the debts of the partners to the firm, as ascertained on the
ordinary partnership accounts, are payable on the same
footing as their other debts ; and if this rule were applied
by the Court, the joint estate might prove against the
separate estate of anypartner in competition with the separate
creditors for the balance due from him to the firm. The
creditors of the firm would thus be in a far better position
than they are at present. As it is, the partners may have
considerable separate property, and be largely indebted to
the firm, and yet their separate creditors may be paid in
full, while the creditors of the firm get hardly anything. 1
The law of Scotland does treat the firm as a separate
person, and so far agrees with the usage of merchants ;
but on the point now before us it differs from the mercantile
scheme of accounts as well as from the law of England.
The rule is, that "upon the sequestration of co-partners
is founded :" per Lord Eldon, Gray v. Chisicell (1803) 9 Ves. at
p. 126, 7 R. R. 152 ; to the like effect in Dutton v. Morrison (1810-1)
17 Ves. at p. 211, 11 R. R. 65 ; see, too, Lodge v. Prichard (1863) 1
D. J. S. 613, per Turner, L.J. Story (on Partnership, §§ 377,
382) says that it "rests ou a foundation as questionable and un-
satisfactory as any rule in the whole system of our jurisprudence:"
Kent, on the other hand (Conim. iii. 65), thinks it on the whole
a reasonable one. Lord Blackburn has all but said that it was
invented merely to save trouble. '• The reason was, I take it,
not upon the ground that there was a right in the private
creditors to be paid out of the separate estate, or a right in the
joint creditors to be paid out of the joint estate, for I do not
think that there was any such rule ; but it was said the rule was
to be adopted, partly, at least, on the ground of convenience in
administering the bankruptcy law. It was thought that the adminis-
tration of the bankruptcy law could not be conveniently carried out
if the estates were to be mixed. Whether that was a right notion or
not I do not know : " Read v. Baihy (1877) 3 App. Ca. at p. 102.
1 See the extract from Cory on Accounts given in Lindley, 713, 714.
JOINT AND SEPARATE ESTATES. 153
their separate estates are applicable to the payment pari Part II.
passu of their respective separate debts, and of so much — —
of the partnership debts as the partnership estate is
insufficient to satisfy. The creditor in a company [i.e.
partnership] debt, in claiming upon the sequestrated estate
of a bankrupt partner, must deduct from the amount of
his claim the value of his right to draw payment from the
company's funds, and he is ranked as a creditor only for
the balance." 1 This is less favourable to partnership
creditors than the mercantile rule, though more so than
the English rule, and it is more complicated in working
than either. The English rule was preferred to the Scottish
by most of the persons and bodies who returned answers to
the Mercantile Law Commission ; whereas, on the other
matters of difference between the partnership law of the
two countries, the opinions given were almost unanimous
in favour of the law of Scotland.
In France no express directions on this point are given
by the Civil or Commercial Code. The prevailing opinion
seems to be that the creditors of the firm have a prior
claim on the partnership property, and may also come
upon the separate property in competition with the separate
creditors for any remaining deficit : " and this is the rule
expressly adopted by the Swiss Federal Code of Obligations,
Arts. 566 and 568.
The German law on the subject is now contained partly
in the Civil Code in force since 1st Jan. 1900, partly in
the Bankruptcy Act (Konkursordnung) , revised as of the
same date. The primary liability of partnership assets for
1 Second Report of Mercantile Law Commission, Appendix A,
p. 99. It must be remembered that in Scotland the lirm can be
bankrupt without the partners being bankrupt.
2 Troplong, Droit. Civ. Expl., Contrat de la Societe, torn. 2,
nos. 857-863 ; Sirey, Codes Annotes, on Code Civ. 1864, nos. 10-12.
154
PROCEDURE AND ADMINISTRATION.
Part II.
Chap, III.
Exceptional
rights of
proof in
certain cases.
When credi-
tors of firm
may prove
against sepa-
rate estate.
partnership debts is dealt with in ss. 732 — 735 of the
Civil Code ; by s. 212 of the Konkursordnung a joint
creditor, in the event of a partner's separate estate being
administered in bankruptcy, can prove, apparently paripassu
with separate creditors, for any balance of his debt remaining
unsatisfied by his claim against the partnership assets.
The rules as to the order of distribution of joint and separate
assets are treated here, for the purposes of " choice of law,"
as a matter of procedure belonging wholly to the lex fori. 1
2. A creditor of the firm may nevertheless
prove his debt in the first instance against the
separate estate of a partner if the debt has been
incurred by means of a fraud practised on the
creditor by the partners or any of them, 2 or
(it seems) if there is no joint estate.
Illustration.
A. and B., trading in partnership, induce C. to accept bills
of exchange to a large amount by representing them as drawn
to meet purchases of cotton on the joint account of A. andB.'s
firm and C. The cotton has never been really bought. A.
and B. become bankrupt. C. is entitled to prove at his
election against the joint estate or the separate estates. 3
1 Bullock v. Gaird, L. R. 10 Q. B. 276, 44 L. J. Q. B. 124 ; Re
Doetsch [1896] 2 Cli. 836, 65 L. J. Ch. 855.
2 Ex parte Adamson (1878) 8 Ch. Div. 807, 47 L. J. Bky. 103, diss.
Bramwell, L.J. The principle seems to be this . the creditor may
proceed at his election against the joint estate for the partnership
debt, or against the separate estates for the equitable liability to
restore the money obtained by fraud. This liability constitutes a
provable debt, being treated apparently as a liquidated duty
quasi ex contractu. And the right seems to be the same against
the separate estate of a partner personally innocent of the fraud:
Ex parte Salting (1883) 25 Ch. Div. 148, 53 L. J. Ch. 415, where the
point was not decided, as the partner had given a separate guaranty.
:i Ex parte Adamson (1878) 8 Ch. Div. 807, 47 L. J. Bky. 103.
JOINT AND SEPARATE ESTATES. 155
It was formerly held that joint creditors might also Part II.
prove in the first instance against a partner's separate _ —
estate in, cases where there was no joint estate. This j oin t r e 3 tate.
operated as a most capricious exception to the general rule,
for the existence of joint estate of any pecuniary value,
however small, such as office furniture worth a few shillings,
was enough to save that rule from it. And it was thought
by many that the exception was tacitly abrogated by sect .
40 of the Bankruptcy Act, 1883, which makes no mention
of it. But it has been held that, as the law was settled by
a long course of authority, the Court could not treat it as
altered by mere negative implication, and that accordingly
it is still in force. 1
3. The trustee of the joint estate of a bank- where joint
rupt firm may prove 2 against the separate estate prove against
of any partner, or the joint estate of any distinct estates or
firm composed of or including any of the part- minor firm.
ners in the principal firm, debts arising out of
either of the following states of fact : —
1. Where that partner or distinct firm has
dealt with the principal firm in a business
carried on by such partner or distinct firm
as a separate and distinct trade, and the
principal firm has become a creditor of such
partner or distinct firm in the ordinary way
of such dealing : 3
2. Where that partner has fraudulently
1 Be Budgett, Cooper v. Adams [1894] 2 Ch. 555, 557, 63 L. J. Ch.
847 ; and see Lindley, 749.
2 That is, on behalf of the creditors of the firm.
3 Lindley, 754.
156 PRO'EDVRE AXD ADMINISTRATION.
Part ii. converted partnership property to his own
1 U1 use 1 without the consent or subsequent ratifi-
cation of the other partner or partners. 2
Illustrations.
1. A., B., C, D. and E. are bankers in partnership at York,
and A., B., G. and D. are bankers in partnership at Wake-
field. A balance is due to the York firm from the Wakefield
firm on account of dealings between the two banks in the
ordinary course of banking business. The York firm, and
therefore also the Wakefield firm, becomes bankrupt. The
trustee of the York firm may prove against the estate of the
Wakefield firm for this balance. 3
2. A. and B. become partners from the 1st of January.
Under the articles all partnership moneys are to be paid into
their joint names at a particular bank, and each partner may
draw out £50 a month for his own use. An account is
opened at the bank in the joint names of A. and B., and
partnership moneys are paid into it. On the 1st of February
A. draws out £550 instead of £50 without the knowledge of
B., and the firm shortly afterwards becomes bankrupt. The
trustee of the joint estate may prove against A.'s separate
estate for £500. 4
1 Lindley, 751.
2 The comparison of Ex parte Harris (1813) 2 V. & B. 210, 1
Rose, 437, 13 R. R. 65, with Ex parte Yoiige (1814) 3 V. & B.
31, 2 Rose, 40, 13 R. R. 135, and the judgment of Jessel, M.R.,
in Lacey v. Hill (1876) 4 Ch. L>. 537. affirmed in the House of Lords,
nom. Read v. Ballet) (1877] 3 App. Ca. 94, 47 L. J. Ch. 161, seems
to give this as the true form of the rule. For further remarks see
par. 4 below. Lord Eldon's own terms, several times repeated in
Ex parte Harris, are " knowledge, consent, privity or subsequent
approbation." I have ventured to act on Sir G. Jessel's intima-
tion in J.aeeij v. Hill that fewer words would probably have done
as well.
1 Ex parte Cattell (18:20) 2 Ul. & .1. 124, 5 L. J. Ch. 71, 28
R. It. 170.
1 LVr Lord Eldon, Ex parte Harris (1813) 2 "V. & B. at p. 214, 13
R. H. (II).
ADMINISTRATION OF ESTATES. 157
3. A. and B. are partners under articles which provide that Part II.
money received by either of them on the partnership account Chap, III,
shall be paid monthly into a certain bank, and that each
partner may draw out £50 per month for his own use. A. is
the acting partner, and with the knowledge of B. pays the
moneys received by him on the partnership account into his
private account at his own bankers, and B. himself pays some
partnership moneys into A.'s account. A. draws on the
partnership funds so standing to his own account beyond
the amount permitted by the articles, and also retains other
partnership funds in his hands, and applies them to his own
use without ever paying them in. The firm becomes bank-
rupt. The trustee of the joint estate cannot prove against the
separate estate of A. for the moneys drawn out in excess or ,
not paid in, as B. has by his conduct allowed A. to have the
sole dominion over the partnership funds, and must be taken
to have consented to the unlimited exercise of that dominion. 1
4. [A. and B. are' partners, A. being the sole acting partner.
A. pays out of the partnership property private debts of his
own and other debts for which, under the provisions of the
partnership articles, not the firm but A. separately is liable.
The firm afterwards becomes bankrupt. The trustee of the
joint estate cannot prove for the amount of these debts against
a separate estate of A., since A.'s conduct does not amount to a
fraudulent conversion of partnership property to his own use. 2 ]
1 Ex parte Harris (1813) 2 V. & B. 210, 13 R. R. 65, and less fully
in 1 Rose, 437. " The necessary effect of the transaction being to
give the dominion over the whole fund to one . . . the other
must be taken to have consented to that dominion : " 2 V. & B. at
p. 215, 13 R. R. 70.
2 Ex parte Lodge and Fendal (1790) 1 Ves. Jr 166, 1 R. R. 99, and
see 2 V. & B. 211, n., 13 R. R. 67, n., and Cooke's Bankrupt Laws,
530, 8th ed. The opinion of the Court was at first the other way,
and the case has been considered one of great hardship : see the
judgment in Ex parte Yonge (1814) 3 V. & B. 31, 34, 2 Rose, 40, 13
R. R. 135. It is difficult to understand the real grounds of the
decision from the report itself; but it must now be taken that the
case was one of the same class as Ex parte Harris (1813). See the
158
PROCEDURE AND ADMINISTRATION.
Part II. 5. A., B. and C. are partners in a bank, A. being the sole
Chap. Ill, man agtng partner. The articles contain clauses against over-
drawing. A. draws large sums from the funds of the bank
by means of fictitious credits and forged acceptances, and
thereby conceals from B. and C. (who trust A.'s statements
without making further inquiry) the fact that he has over-
drawn his private account in contravention of the partnership
articles. A. dies, and shortly afterwards B. and C. become
bankrupt. The trustees of B. and C.'s joint estate may prove
against A.'s estate for the amount of the partnership moneys
misapplied by him. 1
Rule against
proof by
partners in
competition
with creditors.
4. Where the joint estate of a firm or the
separate estate of any partner is being adminis-
tered, no partner in the firm may prove in com-
petition with the creditors of the firm either
against the joint estate of the firm 2 or against
the separate estate of any other partner 3 until
all the debts of the firm have been paid.
Explanation. — This rule applies to a person
who, not being in fact a partner, has, by holding
himself or allowing himself to be held out as a
comments on it in the judgment there, -2 V. & B. at p. 213, 13 R. E.
68, and Ex parte Hinds (1849) 3 De G. & Sm. at p. 615, and by Lord
Blackburn in Read v. Bailey (1877) 3 App. Ca. at p. 103, who deals
with it thus : " I collect that in that case the dormant partner had,
by deed, given the acting partner who carried on the business the
amplest authority to invest the money in any way he pleased, and
he pleased to invest it by lending it to himself, to pay his private
debts. That was a very wrong thing indeed ; it was, as Lord Eldon
afterwards expressed it, an abuse of his authority— a most improper
use of his authority— but he did act upon the authority/'
1 Laeey v. Hill (1876) 4 Ch. Div. 537, affirmed in the House of
Lords, nom. Rend v. Bailey (1877) 3 App. Ca. 94, 47 L. J. Ch. 161.
2 Lindley, 739.
:l lb. 75.5.
ADMINISTRATION OF ESTATES. 159
partner, become liable as such to the creditors Part n.
of the firm generally, l but not to one who has
so become liable to some only of the creditors. 2
A married woman who lends money out of her separate
property to a firm of which her husband is a member can
(if the loan is really and not colourably a loan to the firm
as distinct from the husband in person) prove against the
joint estate like any other creditor. Sect. 3 of the Married
Women's Property Act, 1882, cannot be extended so as to
put her in the position of a partner, and bring her within
this or an equivalent rule. 3
Exceptions. — Partners may nevertheless prove Exceptions
against the joint estate of the firm or the separate cumstances.
estate of a partner, as the case may be, for debts
which have arisen under any of the following
states of fact : —
1. Where two firms having one or more
members in common, or a firm and one of its
members, have carried on business in separate
and distinct trades and dealt with one another
therein, and the one firm or trader has become
a creditor of the other in the ordinary way of
such dealing : *
1 Ex parte Hayman (1878) 8 Ch. Div. 1 1, 47 L. J. Bky. 54.
2 Ex parte Sheen (1877) 6 Ch. Div. 235. In the one case there
s an ostensible partnership apparent to the public, in the other
onljr circumstances creating at most a liability towards particular
persons.
3 Re Tuff, Ex parte Nottingham, (1 887) 1 9 Q. B. D. 88, 56 L. J. Q. B.
440.
* Lindley, 743, 756.
160 PROCEDURE AND ADMINISTRATION.
Part ii. 2. Where the separate property of a partner
Chap ' m ' has been fraudulently converted to the use of
the firm, 1 or property of the firm has been
fraudulently converted to the use of any
partner, 2 without the consent or subsequent
ratification of the partner or partners not
concerned in such conversion : 3
3. Where, having been bankrupt, a partner
has been discharged, and has afterwards
become a creditor of the firm 4 [or of another
partner 5 ] .
Ilhtslraiions.
1. A., B. and C. are partners under articles which provide
that, if any partner dies, his share shall be taken by the
surviving partners at its value according to the last stock-
taking, with interest at 5 per cent, on its amount in lieu of
profits up to the day of his death, and shall be paid out by
instalments. A. dies, and after his death, and before the
ascertained value of his share has been paid to his executors,
B. and C. become bankrupt. A.'s executors cannot prove
against the joint estate of the firm for the amount due to
them in respect of A.'s share till all other debts of the firm
contracted during A.'s lifetime are paid. 6
2. If, the other facts being as in the last illustration, all
debts of the firm contracted in A.'s lifetime have been paid
1 Per Lord Eldon, Ex jxirte Sillitoe (1824) 1 Gl. & J. at p. 382.
- Lindley, 756.
6 See note '-, p. 150, above.
1 See lllust. 10, p. 1<«, below.
° This case would presumably follow the analogy of the other.
n Nioitum v. Gordon (187»i) I App. Ca. 195, 45 L. J. Bky. 89,
iifliriiiin;,' s. c. noni. Ex parte Gordon i' 1 874) L R. 10 V,h. IfO. 44 T ,T.
Ilkv. 17.
, ADMINISTRATION OF ESTATES. 161
before the bankruptcy, A.'s executors may prove for the full Part II.
amount ; for here they are not competing with any creditor Chap. III.
of A. 1
3. A. and B. are partners. The partnership is dissolved by
agreement, A. giving B. a bond for £10,000 and interest, and
B. transferring to A. all his interest in the partnership. A.
and a third person, C, also covenant to pay the debts of the
firm. A. becomes bankrupt. B. assigns his separate pro-
perty to trustees for the benefit of the creditors of the firm.
The trustees under this assignment cannot prove the bond
debt against A.'s estate until all the debts of the firm are
paid, or unless the creditors of the firm accept the assign-
ment of B.'s property as payment in full and release the joint
liability of A. and B. 3
4. A., and B. are partners. The firm becomes bankrupt.
Before the bankruptcy A. is indebted to B. upon a contract
independent of the partnership. It is known that there will
be no surplus of A.'s separate estate after satisfying his
separate debts, whether B.'s debt is admitted to proof or not.
B. may prove his debt against A.'s separate estate, as he does
not thereby compete with any creditor of the firm. 8 It is
doubtful whether he might so prove it if A.'s separate estate
were solvent. 4
5. A. and B. are traders in partnership, A. being a dormant
partner. They dissolve the partnership by agreement, and B.
takes over the business of the firm, and is treated by its
creditors as their sole debtor. On the dissolution an account
is stated between A. and B. which shows a balance due to A.
Afterwards A. sues B. for the amount, the action is unde-
fended, and A. signs judgment for the debt and costs. Some
time after this B. becomes bankrupt. A. can prove this debt
in B.'s bankruptcy, because the partnership debts have been
1 Ex parte Edmonds (1862) 4 D. F. J. 488. The fact that the joint
debts had been paid appears by the head-note.
- Ex parte Collinge (1863) 4 D. J. S. 533.
3 Ex parte Topping (1865) 4 D. J. S. 551.
4 Lacey v. Hill (1872) L. R. 8 Ch. 441, 445.
P. M
162 PROCEDURE AND ADMINISTRATION.
Part II. converted into the separate debts of B., and B.'s debt to A. on
Chap. Ill, t jje account stated is a purely separate debt. 1
6. A. and B. are partners. A. also carries on a separate
trade on his own account, and in that trade sells goods to the
firm of A. and B. The firm bf A. and B. becomes bankrupt.
A. may prove against the joint estate for the balance due on
the dealings between A. in his separate business and the firm
of A. andB.2
7. A., B., C. and D. are bankers in partnership under the
firm of C. & Co. A. and B. are ironmongers under the firm
of A. & Co. A. and B. indorse in the name of A. & Co. bills
remitted to them by C. & Co., and procure them to be dis-
counted on the credit of this indorsement ; they also draw
bills in the name of A. & Co. for the use of C. & Co. The
firm of C. & Co. becomes bankrupt. A. and B. cannot prove
against the joint estate for the balance due to them on these
transactions, as their dealings with C. & Co. were not in the
course of their separate trade, but only " for the convenience
of the general partnership." 3 The same rule applies even if
A. & Co. are bankers. 4
8. A., B. and O. are bankers in partnership. C, the
managing partner, becomes bankrupt. A balance is due
from him to the firm on the partnership account, and lie has
also obtained large sums of money on bills drawn and indorsed
by him in the name of the firm, and applied the money to his
own use, and A. and B. have been compelled to take up the
bills. A. and B. having paid all the debts of the firm existing
at the date of the bankruptcy, may prove in C.'s bankruptcy
for the amount thus received and misapplied by him. 5
!). A. and B. are partners under articles which provide that,
if A. dies during the partnership, B.'s share in the business
1 Ex parte Qrazebrook (1832) 2 D. & C'h. 1ST ; see the explanation
in Lmdley, 758.
- Ex parte Cook (1831) Mont. 228.
3 E.r parte SMUoc (1821) 1 Gl. & J. 374, 2 L. J. Ch. 137, 26 R. R.
204.
* Ec parte Mamie (18(17) L. R. 2 Ch. 550.
1 /•;.(• parte Yonge (1814) 3 A'. & B. 31, 2 Rose, 40, 13 R. R. 135.
ADMINISTRA TION OF EST A TES. 163
shall belong to A.'s representatives. A. dies daring the part- Part II.
nership, having appointed B. and others his executors. B. is Chap. III.
the sole acting executor, and continues the business. He
receives income of the separate property of A., and employs it
in the business without authority. A.'s estate is insolvent,
and is administered by the Court. B. becomes bankrupt, and
the joint estate of the late firm is administered in the bank-
ruptcy. The receiver of A.'s estate may prove in the bankruptcy
of B. for the moneys misapplied by B. as A.'s executor. 1
10. A firm becomes bankrupt. One of the partners obtains
his discharge, and afterwards takes up notes of the firm. He
may prove for their amount against the joint estate. 3
11. G. and K. are partners under the firm of C. & Co. C,
without K.'s knowledge, procures G. and W. to establish a
business under the firm of W. & Co., W. being the manager
and holding himself out as a principal, and G. a trustee for C,
who is the only real principal. Dealings take place between
the firms of C. & Co. and W. & Co., and the firm of W. & Co.
becomes indebted to the firm of C. & Co. for goods sold and
money lent in the ordinary course of business. These dealings
are not known to K. Both C. & Co. and W. become bankrupt.
Here C. & Co. cannot prove against "W.'s estate, inasmuch as
there is not any real debt. 3
The exceptional right of proof in cases where there has Principles of
been a wrongful conversion of partnership property to the r j g ht of proof
use of one partner or vice versa is established by compara- ritv^sbe
tively early authorities which settle the principle, hut are wrongfully
converted to
' the use of the
1 Ex parte Westcott (1874) L. R. 9 Ch. 626, 43 L. J. Bky. 119. firm or of a
= Ex parte Atkins (1820) Buck, 479. partner.
3 Be WaJceham, Ex parte Gliddon (1884) 13 Q. B. D. 43. This is
a singular case. As between. C. & W. there was no real contract
making W. liable to pay, since C. knew all the facts ; as between
K. & W. there might have been a contract by holding out if K.
had known of the transactions at the time, but he did not ; neither
could K. get the benefit of O.'s ostensible contract by ratification, for
there was nothing to ratify. The only real debt was from C. to
C. & Co. Cp. Lindley, 754.
M 2
164
PROCEDURE AND ADMINISTRATION.
Part II.
Chap. III.
Fraud in
strict sense
need not be
proved.
not very clear in their language, and leave sundry questions
open as to the limits of the rule. It is somewhat unfortu-
nate that E.r parte Luilf/r and Fendal 1 acquired the
reputation of being a leading case on the subject ; for the
facts are not stated in sufficient detail, and the ultimate
decision is nowhere fully reported. The real leading case
appears rather to be Ex parte Harris," which was in fact
so treated in Lacey v. Hill*
In this last case the whole question is dealt with, and
especially the judgment of Sir G. Jessel, then Master of
the Eolls, greatly lessens the difficulty of giving a complete
and exact statement of the law.
The points specially considered were the following : —
First, what is a fraudulent conversion of partnership
property to a partner's separate use 4 within the meaning
of the rule ? A wilfully dishonest intention, or conduct,
which, in the language of Lord Eldon, adopted by
Jessel, M.R., amounts to stealing the partnership property,
is generally found to be present in these cases, but it need
not be proved in every case.
" It is not," said Sir G. Jessel, 5 '" necessary for the joint
estate 4 to prove more than, in the words of Lord Eldon, 6
that this overdrawing was for private purposes, and without
the knowledge, consent, privity, or subsequent approbation
of the other partners. If that is shown, it is prima facie
1 1 Yes. Jr. Kit? (17"HI) ; see note -, p. 157, above.
" 12 A'. & B. 210, 13 R. E. 65 (1X1;)).
3 See note 3 , p. 156, above : 4 C'h. Div. 537 ; nom. Read v. Bailey
(1877) 3 App. Co. 94, 47 L. J. Ch. 161.
'' Everything here said is equally applicable, of course, to the
converse case, which, however, is in practice very rare, if indeed it
occurs at all.
6 4 Ch. D. at p. 543.
6 Ex parte Harris (1813) 2 V. & B. atp.'214, 13 R. R. at p. 68.
EFFECT OF FRAUDULENT CON VERS ION. 165
a fraudulent appropriation within the rule." Hence it Part II.
would appear that the term fraud is used for the purposes — — -V
of this rule in the wide sense formerly given to it by
courts of equity. Lord Blackburn puts the question in a
slightly different way: "Was this debt in respect of which
the claim is sought to be made upon the separate estate
contracted by the authority, expressed or implied, of the
firm, though that authority might have been abused in
contracting it, or was it done by fraud, without any
authority, by an absolute fraudulent conversion of the
property of the firm?" 1 It is said, again, that a mere
excess in degree of an act authorised in kind, such as an
overdraft entered in the books without concealment, is not
fraud within the meaning of the rule. 3 These remarks do
not seem to agree with the proposition laid down by
Sir G. Jessel in its full extent ; it was not necessary to
define the point, as in the case before the Court the fraud
was gross and elaborately concealed.
Next, what will amount to implied authority ? It must Consent or
be admitted that one partner may give assent by conduct may ^ e w
as well as by words to the uncontrolled and unlimited COIlduot :
question or
exercise of dominion over the partnership funds by the constructive
other, and that a general assent so given may have the
same effect as regards the other partner's dealings with
the funds as if those dealings had been severally and
specially authorised. So much is established by the
decision in Ex parte Harris. 3 But a distinct question
remains, whether the doctrine of constructive notice
applies to these cases; in other words, whether means of
1 3 App. Ca. 104 (1877).
' Lord Cairns, 3 App. Ca. 99 (1877) and James, L.J., 4 Ch. Div.
553 (1876).
'2Y.&B. 210, 13 R, R. 65 (1813).
166 PROCEDURE AND AMIINISTMAT10X.
Part II. knowledge on the part of the partner defrauded are equiva-
chap ' n1, lent to actual knowledge. If he might have discovered the
misappropriation of partnership funds by using ordinary-
diligence in the partnership affairs, can he be deemed to
have assented to the misappropriation ? or (which seems a
better way of putting it) is he estopped from saying that
the misappropriation was not consented to or ratified by
him ? There is some show of authority in favour of an
affirmative answer. Lord Eldon said, in Ex parte Yonge}
" If his partners could have known that he [the acting
partner] had applied it to his own purposes from their
immediate or subsequent knowledge upon subsequent
dealing, their consent would be implied : " a dictum which,
though far from lucid, seems in its most natural reading
to lay down the doctrine that constructive notice or means
of knowledge will have the same effect as actual consent
or a ratification by words or conduct founded on actual
knowledge. And in the much later case of Ex parte
Hinds," the judgment of the Commissioner, from which
Knight Bruce, V.-C, did not dissent, proceeds without
hesitation on this doctrine. The case was finally disposed of,
however, on the ground that there was in fact no conversion
at all, the investment in question, though unauthorised,
having been made on the partnership account.
Decision in The contrary doctrine, on the other hand, was distinctly
thlt'dortriSf and P ositiTCl y laid down by Sir G. Jessel in Laccij v. Hill, 3
of construe- and does not appear to have been contested on the appeal
tive notice is rr
not here to the House of Lords, the result of which was to affirm
app 1C ' the decisions below in all points. 4 There must be, he said
1 3 A'. & B. lit p. 36, 13 R. E. at p. 138 (1814).
-' 3 De G. & Sin. 613, 616-7 (1849).
3 4 Oh. 1). 537 (1870).
' yiV.i</ v. lktiliij (1877) 3 App. Ca. 94, 47 L. J. Oh. 161.
EFFECT OF FRAUDULENT CONVERSION. 167
in effect, a real consent or acquiescence ; and acquiescence Part II,
means, not the existence of facts which may be said to - —
amount to constructive notice, but standing by with know-
ledge — actual knowledge — of one's rights, both in fact
and law. Neither can the result aimed at by the theory nor that of
of constructive notice be obtained in another way by n e g£g ellce y
putting it on the ground of estoppel by negligence. A
person who has committed gross fraud — or his creditors
who stand in his place — cannot be heard to complain of
the negligence of the person defrauded in not finding out
the fraud sooner. The language of the judgment leaves
room for the suggestion that this does not apply to a case
where there is not actual fraud in the strict sense, a stealing
of the partnership funds ; so that in such a case it may
still be arguable that means of knowledge will do. But
there is hardly room for a distinction of this kind when
the misappropriation such as to give a right of proof is
once established. Absence of concealment and facilities
for discovery by the other partners are material, if at all,
rather on the preliminary point whether the dealing was
indeed fraudulent, as in the case put in the Court of
Appeal of overdrafts being truly entered in the books in
the usual way.
It was further argued in Lacey v. Hill that, in order to
establish the right of proof against the separate estate, it
was necessary to show that the separate estate (that is, the
fund available for the separate creditors) had been actually
increased by the sums misappropriated. This argument,
apparently a novel one, found no favour with the Court.
A man's separate estate is increased by any increase of
his private means ; increasing his own means out of the
partnership estate, whatever he does with the funds so
taken, is in fact increasing his separate estate. " Whether
1G8
PROCEDURE AND ADMINISTRATION.
Part II.
Chap, III.
Ordinary
Tight of credi-
tors against
deceased part-
ner's estate.
Double proof
where distinct
causes of
action.
the separate estate has in the result been increased or not
—whether at the time of the proof it is larger than it
otherwise would have been or not — is a matter which does
not concern the application of the rule, and it is sufficient
that at one time the separate estate was increased when
the property was thus fraudulently converted and taken
for the purpose of one partner." l The Court has nothing
to do with tracing the subsequent fate of the sums mis-
appropriated : if in any particular case they could be traced
and identified in a specific investment, the right of the
joint estate would be of a different kind ; there would be a
case, not for proof, but for restitution. 2
It will be remembered that apart from these special
rules a partnership creditor is always entitled to a remedy
against the estate of a deceased partner concurrently with
his right of action against any surviving partner, but
subject to the prior claim of the deceased partner's separate
creditors ; and that it is immaterial in what order these
remedies are pursued if the substantial conditions of not
competing with separate, creditors, and of the surviving
partner being before the Court, are satisfied in the
proceedings against the deceased partner's estate. 3
It will also be observed that where a joint liability and
one or more separate liabilities are created in different
rights in the course of the same transaction, there is no
rule against the concurrent enforcement of both. Trustees
of a settlement paid money for the purpose of a specific
investment to a firm of solicitors in which one of the
trustees was a partner ; that firm misapplied the money
1 Lord Cairns, 3 App. C.i. 100 (1877).
- 4 Ch. Div. 545.
' lie lltxhjKuii, Beckett v. Kamsduh (1885) 31 I'll. Div. 177, 55 L. J.
Cli. i!41, and set' sect. !> of the Partnership Act, p. 41, above.
ADMINISTRATION OF ESTATES. 16'J
and became bankrupt ; the new trustees were admitted to Part II.
prove both against the separate estate of the defaulting ' — '~
trustee in respect of his breach of trust, and against the
joint estate of the firm in respect of their contract to
invest or restore the money (these being distinct and
independent obligations), without deciding whether the
contract of the firm was not of itself joint and several. 1
5. Any creditor of a firm holding a security Rights of
„',.,,, , i r> ioint creditors
for his debt upon separate property of any holding
, , ,-i • • , , , <; separate
partner may prove against the joint estate or security, or
the firm, and any separate creditor of a partner comeise y-
holding a security for his debt upon the property
of the firm may prove against that partner's
separate estate, without giving up his security :
provided that the creditor must in no case
receive in the whole more than the full amount
of his debt. 2
Explanation. — Eepresentations made to a
creditor by the partner or partners giving him
a security that the property on which the
security is given is separate, or is the property
of the firm, as the case may be, do not affect or
* extend the application of this rule. ' A
1 Re Parkers, Ex parte Slieppard (1887) 19 U. 13. D. 84, 56 L. J.
Q. B. 338.
2 Re Plummer (1841) 1 Ph. 56, 60 ; Rolfe v. Flower (1866) L. R. 1
P. C. at p. 46 ; Lindley, 739, 766 sqq. For the general rule as to the
treatment of secured debts in bankruptcy, see lb. 727 sqq., and
Schedule 2 to the Bankruptcy Act, 1883 ; also Gouldery v. Bartrum
.(1880-1) 19 Ch. Div. 394, 51 L. J. Ch. 265 ; Societe GSnerale de
Paris v. Gem (1883) 8 App. Ca. 606, 53 L. J. Ch. 153.
J See Illustration 4.
170 PROCEDURE AND ADMINISTRATION.
cEJSi. Illustrations.
1. A., B. and C. are partners, and open a banking account
with I). The bank makes advances to the firm on the security
of the joint and several promissory note of A., B. and C.
Afterwards A. gives the bank a mortgage of separate property
of his own to secure the balance then due and future advances
to a limited extent. The firm becomes bankrupt, being at the
time indebted to the bank beyond the amount covered by the
promissory note and mortgage respectively. After realizing
the mortgage security, D. may prove against the joint estate
upon the promissory note for the balance of the debt. 1
2. A. is in partnership with his son, B. They execute to a
partnership creditor, C, a joint and seveial bond for his debt,
and A. also gives C. an equitable mortgage on land which is
his separate property. The partnership is afterwards dis-
solved. A. dies intestate, and B. becomes bankrupt. The
partnership debts and A.'s other debts are of such an amount
that, apart from this mortgage debt, A.'s estate would be
insolvent. Here C. may prove his debt in B.'s bankruptcy
without giving up his security, as B. has no beneficial interest
in the mortgaged estate, and C.'s security is therefore not on
B.'s estate. 2
3. A. and B. are partners. The firm keeps a banking
account with C. & Co., with whom A. likewise keeps a separate
account. A. deposits with the bank the title-deeds of separate
property of his own, to secure the balance of account due or
to become due from him, either alone or together with any
one in partnership with him. The firm of A. and B. becomes-
bankrupt. Both the account of the firm and A.'s separate
account are overdrawn. C. £ Co. may prove against the joint
estate for the whole balance due from the firm to the bank,
and apportion the proceeds of the security on A.'s property
between the balance due from the firm and that due from A.
as they think fit, allowing for what comes to them under the
1 Ex parte Bate (1838) 3 Deac. 358.
' Ex parte Turney (1844) 3 M. & D. 576.
ADMINISTRATION OF ESTATES. 171
proof against the joint estate. 1 0. & Co. may also prove Part II.
against A.'s separate estate for the residue of A.'s separate Chap. III.
debt due to them, after deducting the apportioned part of the
proceeds of the security. 2
4. A. and B. are partners. A. is a shareholder in a bank
incorporated under the Companies Acts, which by the articles
of association has a lien on the shares of every shareholder for
debts due to the bank from him either alone or jointly with
any other person. A.'s shares are in fact, but not to the know-
ledge of the bank, partnership property. The firm of A. and
B. becomes bankrupt. The bank cannot treat these shares as
A.'s separate property for the purpose of its lien, and cannot
prove against the joint estate for the balance due from the
firm of A. and B. without deducting the value of the shares. 3
6. "If a debtor was at the date of the Double proof
• • t Tii- . /> j ■ / • , allowed on
receiving order liable in respect ol distinct con- distinct
tracts as a member of two or more distinct
firms, or as a sole contractor and also as mem-
ber of a firm, the circumstance that the firms
are in whole or in part composed of the same
individuals, or that the sole contractor is also
one of the joint contractors, shall not prevent
1 For this purpose they may apply to the Court to have a dividend
declared first on the joint estate under sect. 59 of the Bankruptcy
Act, 1883 : see p. 145, ahove.
" Ex parte Dickin (1875) L. E. 20 Eq. 767, 44 L. J. Bky. 113.
3 Ex parte Manchester and County Bank (1876) 3 Cli. Div. 481, 45
L. J. Bky. 149. The reason is, according to Mellish, L.J. (3 Ch. Div.
at p. 487), that the question is not between the partners and the
secured creditor, but between the secured creditor and the other
creditors of the firm, so that the principle of estoppel does not apply-
James, L.J., doubted as to the principle, and Baggallay, J. A.,
preferred to rest the decision on the provisions of the Bankruptcy
Act as to secured creditors.
contracts.
2
172 PROCEDURE AND ADMINISTRATION.
Part ii. proof 1 in respect of the contracts against the
chap. in. 1)r0 pe r ties respectively liable on the contracts.""
In cases not included in the foregoing rule a
creditor to whom a firm is liable, and to whom
its members are also several!}' liable for the
same debt, must elect whether he will proceed
as a creditor of the firm or as a separate
creditor of the partners. 3
Illustrations.
1. A., B., and others are partners in a firm of A. & Co.
A joint and several promissory note is made and signed by
A. & Co., by A. and B. separately, and by other persons.
Afterwards the firm of A. & Co. becomes bankrupt. Here the
contract of the firm and the separate contracts of A. and B.
contained in the same note are distinct contracts within the
above rule, and the holder of the note may prove against and
receive dividends from both the joint estate of the firm and
the separate estates of A. and B. 4
2. A. and B. are partners. They borrow a sum of money
for partnership purposes from C, and C. settles the debt upon
certain trusts by a deed in which A. and B. jointly and
severally covenant with D. to pay the sum. The deed does
not show that A. and B. are partners or that the debt is a
partnership debt. The firm becomes bankrupt. Here it may
1 The statutory right to prove carries the right to receive dividends,
and is in no case merely formal : see Ex parte Honey (1871) L. E. 7
Cli. 178, 41 L. J. Bky. 9.
- Bankruptcy Act, 1883 (46 & 47 Vict. c. 52), Sched. 2, Art. 18,
re-enacting sect. 37 of the Bankruptcy Act, 1869. Cp. Lindley, 765,
766.
3 This was the old general rule, which is now practically reduced
to an exception of no great importance ; Lindley, 765, 766. The
cases cited as illustrations will show that the Court is inclined to
give a lilieiiil application to the modem enactment.
' Ex parte Honey (1871) L. R, 7 Ch. 178, 41 L. J. Bky. 9.
ADMINISTRATION OF ESTATES. 173
be shown by external evidence that the joint contract of A. Part II.
and B. in the deed is in fact the contract of their firm, and 1). Chap, ill,
may prove against the joint estate of the firm in respect of the
joint covenant, and against the separate estates of A. and B.
in respect of their several covenants. 1
7. Where the discharge of any member of Effect of
*- * separate dis-
a partnership firm is granted to him in his charge of
1 ■*■ u nartnpr
separate bankruptcy, he is thereby released
from the debts of the firm as well as from his
separate debts. 2
1 Ex parte Stone (1873) L. B. 8 Ch. 914, 42 L. J. Bky. 73.
2 Ex parte Hammond (1873) L. R. 16 Eq. 614, 42 L. J. Bky. 97.
partner.
174
PART III.
FORMS.
Part III.
Forms.
If the part-
nership is to
be for life it
will be ex-
pressed to be
" for and
during the
joint lives of
the partners.'
FOEM 1.
Deed of Partnership between two business men.
This Indenture made the day of
between A., of etc., and B., of etc., Witnesseth as
follows : —
1. The said A. and B: will become and remain
partners in the business of for the term of
years from the date of these presents, if
they shall so long live, under the style or firm of
, but subject to the provision for deter-
mination hereinafter contained.
2. Either partner shall be at liberty to deter-
mine the partnership at the e*tid of years
from the date of these presents by giving to the
other partner not less than calendar months'
previous notice in writing of his intention to do
so, or by leaving such notice at the place where
the business of the partnership shall for the time
being be carried on.
3. The business of the partnership shall be
carried on at or at such other place or
places as the partners mav from time to time
determine.
FORMS. 175
4. Both the partners will at all times diligently Part in.
employ themselves in the business of the partner-
ship and carry on the same for the greatest
advantage of the partnership.
5. The Bankers of the firm shall be Messrs.
at or such other bankers as shall
from time to time be agreed upon by the partners,
and all moneys and securities of the partnership
except moneys required for current expenses
shall be paid into and deposited with the said
Bankers.
6. Each partner shall have power to draw
cheques in the name of the firm.
7. The capital of the partnership shall consist
of the sum of £ to be paid to the credit of
the firm by the partners in equal shares imme-
diately after the execution of these presents.
8. Neither partner shall without the consent
in writing of the other do any of the things
following : —
(a) Be either directly or indirectly engaged or see Partner-
interested in any trade or business except the i89o, A s °3o.
business of the partnership.
(b) Lend any money or deliver on credit any
goods belonging to or otherwise give credit on
behalf of the partnership.
(c) Give any security or undertaking for the see Partner-
payment of money on account of the partnership. Igso^s >q S .
(d) Kelease or compound any debt owing to or
claim by the partnership.
(e) Enter into any bond or become security for See Partner-
any person or do or knowingly permit to be done \m, tk (2).
any thing whereby the capital or property of the
I y f ; FORMS.
Part in. partnership may be seized, attached, or taken m
Forms. , ■
execution.
see Partner- (f) Assign or mortgage his share or interest
1890,^24(7) in the partnership or introduce or attempt to
and s. si. introduce any other person into the business of
the partnership.
(ij) Hire or dismiss any clerk, traveller or
other servant of the partnership.
(h) Make any journey or voyage on account of
the partnership.
(i) Enter into any contract for the purchase of
property or goods exceeding in value the sum
of £
9. Each partner shall punctually pay and
discharge his separate debts and liabilities and
shall keep the partnership effectually indemnified
against the same,
see Partner- io. Each partner shall be just and faithful to
i89u, s. 28. the other partners or partner in all matters
relating to the business of the partnership and
shall give a true account of and full information
relating to the same as often as he shall be
reasonably required to do so.
By the 11. All outgoings and expenses of the partner-
Act,"i89(i, ship and all losses shall be paid out of the capital
La iossefare, and profits of the partnership, and if the same shall
except where ^ e deficient then by the partners in equal shares.
otherwise i
agreed, to be 12. The partners shall be entitled to the net
equally, and profits of the business in equal shares, and the
ami clause 12 same slia11 be divided between the partners
mn L 1ll> , ., ■, immediately after the settlement in manner
omitted it it . •
i to hereinafter provided of the general annual account
in each vcav.
19 (tcsirci
shorten tin
deed.
FORMS. 177
13. Each partner may draw out of the business Part in.
the monthly sum of £. in anticipation of his —
share of profits for the current year, and' if on
taking the general account in any year he shall
be found to have drawn more than the amount of
profits to which he shall be entitled for that year,
he shall immediately refund the excess.
14. Proper books of account shall be kept by
the partners, and all such entries made therein
as are usually entered in books of account kept
by persons engaged in a business similar to the
business of the partnership. The partnership T K is rI is f pr ?"
books shall be kept at the place of business for s. u (9) of the
the time being of the partnership, and each ac^Tsjjo^
partner shall at all reasonable times have access ^^1^%
to and power to take copies of the same. is desired to
15. On the day of in the year deed.
and on the clay of in every succeeding
year, during the continuance of the partnership, a
general account shall be taken up to the said
clay of of the assets and liabilities and trans-
actions of the partnership, and shall be entered
in two books, and shall be signed in each such
book by each partner, and after such signature
each partner shall keep one of such books and
shall be bound .by such account : provided never-
theless that if any manifest error is found in
the account by either partner and signified to
the other within calendar months after
signature as aforesaid, such error shall be rectified.
16. Upon the determination of the partnership
otherwise than by the death of either partner or
by notice to determine as hereinbefore provided,
178
FORMS.
Part III.
Forms.
If it is desired
to shorten the
deed this
clause may be
omitted in
reliance on
ss. 39 and H
of the
Partnership
Act, 1890.
Short alterna-
tive form by
reference to
the Partner-
ship Act,
1890.
In the case
of a partner-
ship for lives
this and the
next succeed-
ing clause are
unusual.
If the good-
will is to be
paid for, it
should be so
stated.
a general account shall be taken of the assets and
liabilities and transactions of the partnership,
and the assets shall as soon as may be be realised
and the liabilities discharged and the net surplus
after payment of the expenses of realisation and
discharge of liabilities and of any unpaid profits
due to either partner, shall be divided between the
partners in equal shares, and each partner shall
execute and do all such deeds, documents, and
things as may be necessary or convenient for
effecting the speedy winding up of the partnership
affairs, and for such mutual indemnity and release
as may be reasonably required.
16a. Upon the determination of the partnership
by effluxion of time, the affairs of the same shall
be wound up in accordance with sections 39 and
44 of the Partnership Act, 1890.
17. In the event of the partnership being
dissolved by the death of either partner, or by
either partner giving such notice to determine
as aforesaid the other partner shall have power
to purchase as from the date of the dissolution
and upon the terms hereinafter appearing the
share of the partner so dying or giving notice to
determine as aforesaid by giving to him or to his
legal personal representatives notice in writing to
that effect within calendar months from the
date of the dissolution.
18. The purchase-money for the purchase under
clause 17 hereof shall be the net value (but not
allowing anything for goodwill) of the share of
the outgoing partner after satisfying all liabilities
of the partnership outstanding at the date of the
FORMS. VJS
dissolution, and if such value cannot be agreed Part in.
between the parties, the same shall be referred ' —
to arbitration in the manner hereinafter provided.
The purchase-money when ascertained shall be
paid by four equal instalments at the end of four,
eight, twelve, and sixteen months respectively from
the date of the dissolution of the partnership, and
shall (if required) be secured by the bond of the
continuing partner, who shall also at his own cost
execute and do all deeds, documents, and things
necessary for effectually indemnifying the outgoing
partner or his estate from all liabilities of the
partnership ; and the outgoing partner or his legal
personal representatives shall at the request and
cost of the continuing partner execute and do
all deeds, documents, and things necessary for
effectually vesting in the purchaser the share
purchased, and for enabling him to get in all
debts due to the firm, and to carry on alone the
said business as from the date of the dissolution
of the partnership.
19. On the determination or dissolution of the see Partner-
partnership either partner or his legal personal 1890^37,
representatives shall have power to sign in the
name of the firm and publish in the London
Gazette a proper notice of the dissolution of the
partnership.
20. In the event of either partner giving notice
to determine the partnership, and the other
partner purchasing his share as respectively afore-
said, the outgoing partner shall not during the
remainder of the term of the partnership carry
on or be interested directly or indirectly in any
n 2
Forms.
180 FORMS.
Part in. business competing or interfering with the business
of the partnership within a radius of miles
of
21. Any difference which ma}' arise between
the partners or their respective representatives
with regard to the interpretation of these presents
or any part thereof, or as to the rights or liabilities
of either partner under these presents or with
regard to the winding up of or any other matter
or thing relating to the partnership or the affairs
thereof, shall be referred to a single arbitrator in
conformity with the provisions of the Arbitration
Act, 1889.
In witness, &c.
Form 2.
Deed of Partnership between Three Utisinesx Hen.
This Indenture made the day of 1900,
between A. of B. of and C. of
Witnesseth as follows (that is to say) : —
1. The said A., B., and C. and the survivors
of them, will become and remain partners in the
business of from the day of for
the term of years, if they or any two
of them shall so long live, but subject to
determination as hereinafter provided.
2. Any partner may retire from the partnership
at any time after the day of 19 on
giving not less than six calendar months previous
notice in writing to the other partners of his
intention to do so, or leaving such notice at the
FORMS. 181
place where the business of the partnership shall Part in.
for the time being be carried on, and at the '- —
expiration of such notice the partnership shall as
regards the partner giving or leaving such notice
terminate accordingly.
3. The death or retirement of any partner shall
not dissolve the partnership between the remaining
partners.
4. The style or firm of the partnership shall
be
5. The business of the partnership shall be
carried on at the freehold premises, No.
Street, in or at such other place as the
partners, or the majority of them, shall from time
to time agree upon.
6. The bankers of the partnership shall be
Messrs. of or such other bankers as
the partners, or the majority of them, shall from
time to time determine. All moneys and secu-
rities for money belonging to the partnership
(except such money as is required for current
expenses) shall be paid into and deposited with
the said bankers.
7. All cheques drawn on the partnership account
shall be signed by at least two partners.
8. The capital of the partnership shall be the
sum of £ made up as follows : — £1,800,
part thereof, being the agreed value of the said
freehold premises, No. Street aforesaid, and
the stock-in-trade and plant at present on the
same premises, which respectively belong to the
said A., but are to be taken over and become the
property of the caid partnership, and to be credited
182
FORMS.
Part in. to the said A. in the books of the partnership as
— - - part of the capital brought in by the said A.; £200,
further capital to be contributed by the said A. ;
£1,000 to be contributed by the said B. ; and
£1,000 to be contributed by the said C. Such
sums of £200, £1,000, and A' 1,000 are to be paid
into the partnership account with the said bankers
immediately after the execution of these presents.
9. Any further capital which may be hereafter
required for the purposes of the partnership shall
be contributed by the partners in the proportions
in which they shall for the time being be entitled
to the net profits of the said business.
See Partner- 10. Each partner shall be entitled to interest
\ssofsSi. a t the rate of 5 per cent, per annum on the amount
of his capital for the time being in the said
business.
11. All outgoings and expenses of the partner-
ship, and all losses and interest on capital, shall
be payable out of the profits and capital of the
partnership, and, in the case of deficiency, by the
partners in the shares in which they are entitled
to the net profits of the business.
12. The partners shall be entitled to the net
profits of the said business in the shares following :
— the said A. to a moiety, the said B. to one equal
fourth share, and the said C. to one other equal
fourth share. The net profits shall be divided as
aforesaid immediately after the settlement in
manner hereinafter provided of the annual general
account in each year.
13. The partners may at the end of each month,
or otherwise as thev may agree, draw out of the
FORMS. 183
said business on account of their respective shares Part in.
of profits for the current year the following sums, : —
namely, the said A., sums not exceeding £
the said B., sums not exceeding £ and the
said C, sums not exceeding £ . If on taking
the annual general account in any year any partner
shall be found to have drawn more than the
amount of profits to which he shall be entitled
for that year, he shall immediately refund the
excess.
14. Each partner shall at all times devote all
his time and attention to the business of the
partnership, and employ himself therein with
the utmost diligence, and carry on the same for
the greatest advantage of the partnership.
15. No partner shall during the continuance of
the partnership, without the written consent of the
other partners or partner, do any of the things
following : —
(The rest to be the same as clause 8 in Form 1,
omitting (b).)
16. No partner shall lend any money or deliver
on credit any goods belonging to or otherwise
give any credit on behalf of the partnership in
any case in which the other partners or partner
shall have forbidden him to do so, and if any -
partner shall do so he shall make good to the
partnership any loss caused thereby.
17. Proper books of account shall be kept by
the partners, and all such entries made therein as
are usually entered in books of account kept by
persons engaged in a business similar to the
business of the partnership. The partnership
184
FORMS.
Part in. books shall be kept at the place of business for the
* 0TmB ' time being of the partnership, and each partner
shall at all reasonable times have access to and
power to take copies of the same.
18. On the day of in the year
and the day of in every succeeding
year during the continuance of the partnership, a
general account shall be taken up to the said
clay of of the assets and liabilities and
transactions of the partnership, and shall be
entered in three books and shall be signed in
each such book by each partner, and after such
signature each partner shall keep one of such books
and shall be bound by such account ; provided,
nevertheless, that if any manifest error is found in
the account by any partner and signified to the
others within calendar months after signature
as aforesaid, each error shall be rectified.
19. If upon the final determination of the
partnership by effluxion of time, or otherwise than
by death or retirement as aforesaid, there shall be
two or more partners still living, a general account
shall be taken of the assets and liabilities and
transactions of the partnership, and the assets
shall as soon as may be be realised and the
liabilities discharged, and the net surplus (if any)
after payment of the expenses of realisation and
discharge of liabilities and payment of any unpaid
profits or interest on capital due to any partner
and the share of capital of each partner be divided
between the partners for the time being in the
shares in which they shall then be entitled to the
net profits of the partnership, and each partner
FORMS. 185
:shall execute and do all such deeds, documents, Part in.
.and things as may be necessary or convenient for . ' —
-effecting the speedy winding up of the partnership
.affairs, and for such mutual indemnity and release
:as may be reasonably required.
20. If any partner shall die or retire during the
partnership his share shall, as from his death or
retirement, be purchased by and become the
property of the remaining partners or partner on
the terms hereinafter appearing, and if more than
•one then in the shares in which they shall for the
time being be entitled to the profits of the said
business.
'21. The outgoing partner or the representatives
-of the deceased partner (as the case may be) shall,
if such death or retirement happen before the clay
hereby fixed for the settlement of the first annual
general account, be entitled to the capital brought
in by such partner with interest thereon at the
rate aforesaid down to the clay of his death, or if
the same shall happen after that day then to a
.sum of money representing the value of the share
•of the capital and property of the partnership
(including his share of goodwill which is to be taken
in any case to be of the value of £ ) which
shall be shown to be due to such partner upon the
last annual general account, or which would have
been shown to be due to such partner if such
account had been duly taken on the day
•of immediately preceding such death or
retirement, together with interest on capital as
.aforesaid, and in either case the outgoing partner
or the representatives of the deceased partner (as
186
FORMS.
Part in. the case may be) shall also receive an allowance
ToraB - after the rate of per cent, per annum upon
the capital or share of capital and property of the
partnership (as the case may be) of such partner
in lieu of profits from the commencement of the
partnership or from the last annual general
account (as the case may be) to the time of such
death or retirement, the amount so ascertained to
be clue to the outgoing partner or the represen-
tatives of the deceased partner to be paid by the
surviving or continuing partners or partner, and,
if more than one, in the proportions in which
they shall thereupon become entitled to the
profits of the partnership, within two years from
such death or retirement, with interest until
payment at the rate of £, per cent, per
annum.
22. The surviving or continuing partners or
partner shall at their or his own costs execute and
do all such deeds, documents, and things as shall
be necessary or expedient for the purpose of
effectually indemnifying the outgoing partner or
the representatives of the deceased partner from
all liabilities of the partnership, and the outgoing
partner or the representatives of the deceased
partner (as the case may lie) shall, at the request
and costs of the surviving or continuing partners
or partner, execute and do all such deeds,
documents, and things as may be necessary or
convenient for the purpose of vesting all the share
and interest of the outgoing or deceased partner
of and in the partnership and the business and
assets thereof in the surviving or continuing
FORMS. 187
partners or partner and enabling the latter to Part in.
recover and receive the same.
23. On the determination or dissolution of the
partnership any partner (including for this purpose
an outgoing partner), or the representatives of any
deceased partner, may sign in the name of the
firm and publish in the London Gazette a proper
notice of the dissolution of the partnership.
24. If any partner shall retire during the
continuance of the partnership he shall not during
the remainder of the partnership term carry on
or be interested directly or indirectly in any
business competing or in any way interfering
with the business of the partnership within a
radius of miles of
25. Any difference which may arise between
the partners or their respective representatives or
any of them, with regard to the interpretation of
these presents, or any part thereof or as to the
rights or liabilities of the partners or any of
them under these presents or with regard to the
winding up of or any other matter or thing
relating to the partnership or the affairs thereof,
shall be referred to a single arbitrator in conformity Or " to two
with the provisions of the Arbitration Act, 1889. an dan
In witness, etc. umpire ''
Form 3.
Deed of Partnership betiveen Three Solicitors.
This Indenture made the day of
between A. of and B. of and C.
188
FURMH.
Part in. of . Whereas the said A. has for some years
'""" _ p as t carried on the business of a solicitor at
and whereas the said A. has agreed to take the said
B. and C. into partnership with him in the said
business upon the terms hereinafter appearing.
Now this Indenture Witnesseth as follows (that is
to say) : — 1, 2, 3, 4. Samr ax in Form 2.
5. The business of the partnership shall be
carried on at the leasehold premises, No.
in which are vested in the said A. for a
term of years under an indenture of lease dated,
See., and made between, <Xrc, at the rent of £
per annum or at such other place or places as the
partners, or a majority of them, shall from time
to time determine.
6 and 7. Same an in Form 2.
8. The capital of the partnership shall consist
of the said leasehold premises. No. Street
aforesaid, and the office furniture, books, boxes,
safes, and fittings, which are now in or on the
said premises, and of the sum of i'2,100, which is
to be contributed by the partners in equal shares,
and is to be paid into the firm's account as soon
as possible after the execution of these presents.
9. The said leasehold premises and office
furniture, books, boxes, safes, and fittings are
the property of the said A., but are to become the
property of the partnership. The value thereof,
which is to be taken to be i: shall be credited
to the said A. as additional capital brought in by
him into the said business.
10. The said A. shall hold the said leasehold
premises in trust for the firm, and shall be
FORMS. 189
indemnified by and at the expense of the partner- Part in.
Forms
ship against the rent and all covenants and condi- : —
tions on the part of the lessee in the said lease
contained as from the date of these presents.
II, 12, and 13. Same as in clauses 9, 10, and 11
in Form 2.
14. The partners shall be entitled to the net
profits of the said business in the shares following
(that is to say) : — The said A. to two equal third
parts, the said B. to one equal sixth part, and the
said C. to one other equal sixth part. The net
profits shall be divided as aforesaid immediately
after the settlement in manner herein provided
the annual general account in each year.
15 and 16. Same as clause 13 and 14 in Form 2.
17. No partner shall during the continuance of
the partnership without the written consent of the
other partners or partner do any of the things
following : —
(The rest to he the same as clause 8 in Form. 1,
omitting (h) and (g).)
18. No partner shall lend any money belonging
to or give any credit on behalf of the partnership
in any case in which the other partners or partner
shall have forbidden him to do so, nor shall he
undertake any professional business of any kind
after having been required by the other partners
or partner not to do so.
19. No partner shall hire or dismiss, except in
case of gross misconduct, any clerk or person in the
employment of the partnership, or take any articled
clerk without the consent of the other partners
or partner.
190 FORMS.
Part in. 20. All moneys received' at any time by way of
Forms ' — premium from articled clerks shall be treated as
profits of the partnership business.
21. In the event of the firm or any partner
acting as solicitor for or on behalf of any of the
partners, or his wife or children, or their, his, or her
trustees, such business shall not be charged for
except as to payments out of pocket, and except
as to costs recovered against other parties in any
successful action, or defence or other proceedings,
or out of any fund or estate to which such action
or proceeding shall relate, which said costs shall
be carried to the credit of the partnership and
be dealt with as partnership profits.
22. If any partner shall be a trustee in any
matter or business, and shall not be entitled to act
as solicitor in respect of same, either by himself or
his firm, and to be paid as solicitor out of the
trust estate or otherwise, the other partners or
partner may act as such solicitors or solicitor on
their or his own account, and the partner who is
such trustee shall not be entitled to any share in
the profit costs arising out of such business or
matter.
23. Proper books of account shall be kept by
the partners and entries made therein of all such
matters, transactions, and things as are usually
entered in books of account kept by persons
engaged in concerns of a similar nature, and
including particulars of all attendances and profes-
sional business transacted by each partner, and
of all such names, times, and places as may be
necessary or useful for the manifestation of the
FORMS. 191
business of the partnership. The said books of Part in.
account and other books, and all deeds, securities,
letters, papers, and documents belonging or ^ed^orby
relating to the partnership shall be kept at the p^evshi? 16
office for the time being of the partnership, and Act, 1890,
each partner shall at all reasonable times have omitted^ it
free access to examine and copy the same. shortentiie
24. If the said A. shall die during the partner- deed -
ship term the surviving partners or partner shall
during the remainder of the term pay to the
representatives of the said A. an annuity of
M by equal half-yearly payments, to com-
mence from the death of the said A., and to be
deemed to accrue from day to day, and the first
of such payments to be made at the end of
calendar months from the death of the said A.
25. Any partner may, during the continuance
of the said partnership term, assign to a son who
shall have become a duly qualified solicitor the
whole or a part of the share of capital and profits
of such partner in the said business, and to intro-
duce such son as a partner into the said firm to
the extent of the share so assigned to him, and
such son shall on his accession execute a proper
deed binding him to observe all the provisions
herein contained, so far as the same may be
applicable to him, and containing all necessary
and proper provisions for continuing such part-
nership in accordance with the terms of these
presents.
26. Same as clause 18 in Form 2.
27. Same as clause 19 in Form 2, but with the
following additional words at the end: — ''All
192
FORMS.
Part in. documents and papers relating to the said business
Form8 shall, subject to the consent of the clients to
whom the same respectively shall belong, shall
be delivered to the partner who shall have
usually attended to the business of such clients
respectively."
28. In case any partner shall die or become
bankrupt, or retire from the partnership during
the continuance of the said term, the share of
such deceased or outgoing partner shall, as from
the date of his death, bankruptcy, or retirement
(as the case may be), but subject as hereinafter
provided, belong to and be purchased by the sur-
viving or continuing partners or partner, if more
than one, in shares proportionate to their then
shares in the said business.
29. If the surviving or continuing partners or
partner shall, within months from the date of
the death of the late partner, or of his ceasing to
be a partner, as in clause 28 hereof aforesaid, give
to the latter or his legal personal representative or
trustee (as the case may be), a notice in writing
claiming that the partnership affairs shall be
wound up, or shall leave a notice in writing to the
like effect at the office for the time being of the
partnership, then the partnership affairs shall be
wound up as if the partnership had determined
by effluxion of time.
30. The amount to be paid to the outgoing
partner or his trustee, or the representatives of a
deceased partner, shall be ascertained by taking
a general account and making a statement in
writing of the share of such partner of the capital
FORMS. 193
and effects of the partnership and of all unpaid Part in.
profits and interest on capital belonging to him — : —
at the date of his death, bankruptcy, or retire-
ment (as the case may be), and for this purpose
a valuation shall be made of all assets or effects
requiring valuation (the share of goodwill in any
case being taken to be £ ), and the amount
ascertained to be due to the outgoing partner or
his trustee, or the representatives of the deceased
partner, shall be paid with interest on the same
or on any portion from time to time remaining
unpaid by three equal payments at the end of
seven, fourteen, and twenty-one calendar months
respectively from the date of such death, bankruptcy,
or retirement as aforesaid. All necessary and con-
venient deeds, documents, and things shall, at the
expense of the surviving or continuing partners or
partner, be executed and done for effectually vesting
the share of the outgoing or deceased partner in the
business and assets of the partnership in the sur-
viving or continuing partners or partner and for
effectually indemnifying the outgoing partner or his
trustee, or the estate of the deceased partner (as the
case maybe) from the liabilities of the partnership,
and all documents and papers relating to the business
of the firm shall (subject to the claims of clients
to whom the same shall belong) remain with or
be delivered to the surviving or continuing partners
or partner.
31, 32 and 33. Same as clauses 23, 24, and 25
in Fur in 2.
In witness, &c.
194
FORMS.
Part in. Form 4.
Forms.
Deed of Dissolution of Partnership.
This Indenture, made the day of
between A. of the one part and B. and C. of the
other part.
Whereas the said parties have hitherto
carried on the business of in partnership,
under articles of partnership dated the day
of and under such articles the capital and
assets of the partnership belong to them in equal
shares. And whereas the property of the partner-
ship consists of the leasehold properties specified
in the Schedule hereto, which are vested in the
said C. in trust for the said parties, and also of
certain machinery, fixtures, and plant and also the
stock-in-trade, materials, goodwill, book-debts,
contracts, and effects used in the said business
or belonging to the partnership. And whereas it
has been agreed between the said parties that the
said partnership shall be dissolved as regards the
said A. as from the day of next, and
notice of such dissolution has been signed by
them respectively for insertion in the London
Gazette. And whereas it has been further agreed
between the parties that as from the day
of the said business shall be carried on by
the said B. and C. alone, and that the said B.
and C. shall pay to the said A. the net value of
his share in the goodwill and property of the
partnership as on the said day of
and shall take over all debts and liabilities of the
partnership outstanding on the same day and
FORMS. 195
indemnify the said A. in manner hereinafter Part in
Forms.
appearing, and that in consideration of the
premises the said A. shall assign to the said B.
and C. absolutely his one equal third share of
and in the said business and partnership pro-
perty, and shall enter into the covenant by him
hereinafter contained. And whereas a general
account and valuation have been taken and made
of the goodwill, assets, and liabilities of the
partnership, and it has been agreed that the net
value of the said share of the said A., after pro-
viding for all the liabilities of the said partner-
ship as on the said day of is the
sum of £ . And whereas for the purpose
of stamp duty it has been agreed that the sum
of £ shall be taken to be the value of the
said share of the said A. in the said leasehold leaseholds
premises, and the sum of £ shall be the SfgZ'by
value of his share in the residue of the partner- this deed; but
x in every case
ship property and goodwill. Now this Indenture it will be
witnesseth that in pursuance of the said agree- aSg^the
ment and in consideration of the premises, the jj^^dy.so
said parties hereby respectively declare that the as to keep the
,., n ill z j partnership
partnership between them shall, so tar as regards ofi the title.
the said A., be dissolved as from the said Frequently
day of . And this Indenture also witnesseth representing
that in further pursuance of the said agreement Hj 68 ^™?*
and in consideration of the sum of £ now partner is
paid to the said A. by the said B. and C, the said ments y n S '
A. as beneficial owner hereby assigns and transfers of t e h ed c d a n tes '
to the said B. and C. All that one equal undivided tinuing
. , . . -i ■ .a partners give
third part or share ot the said A. ot and in the a bond for the
fixed and movable machinery, plant, moneys, ?hl?ame.°in
o2
196
FORMS.
Part III.
Forms.
either case
the circum-
stances should
be shortly
recited, and
the operative
part of the
deed, of
course,
altered
accordingly.
stock-in-trade, contracts, book-debts, goodwill and
effects of the said partnership, To hold the same
unto the said B. and C. absolutely. And the said
A., as regards the share hereby assigned by him
as aforesaid, hereby appoints the said B. and C.
and the survivor of them, the attorneys or attorney
of him the said A., in the joint names of the said
B. and C. or otherwise, to demand, sue for, and
receive all credits, moneys, and things of the said
partnership hereby dissolved, and to give effectual
receipts and discharges for the same respectively,
and to use all such remedies or proceedings for
the purpose of recovering and getting in the same
as may be deemed expedient, and for all or any of
such purposes to appoint a substitute or substitutes,
and to revoke such substitution, and generally
to act in such manner as may be requisite for
giving to the said B. and C. the full benefit of the
assignment hereby made. And the said A. hereby
covenants with the said B. and C. that he the said
A. will not, at any time hereafter during his life,
carry on or be interested or concerned in carrying
on the business of within a radius of
miles from the town of . And this Inden-
ture further witnesseth that, in consideration of
the premises, the said A. hereby releases the said
B. and C. respectively, and the said B. and C.
hereby respectively release the said A. from the
said articles of partnership and everything therein
contained, and from all claims and demands there-
under or in relation thereto. And the said B.
and C. hereby jointly and severally covenant with
the said A. that the said B. and C, or one of them,
/■ o/n/s. 197
or the persons deriving title under them, or one Part in.
of them, will pay all debts and liabilities of the - — °^^ —
said partnership hereby dissolved outstanding on
the said day of and will, as from the day
of pay and discharge all the debts and
liabilities of the same partnership, and will at all
times hereafter effectually keep indemnified the
said A. and all persons deriving title under him
and his and their estate and effects against all
costs, damages and expenses, claims and demands
in respect thereof, and also against all costs,
damages and expenses, by reason of any action
or proceeding which may be brought or instituted
by the said B. and C. or either of them, or other
person or persons, by virtue of the power of attorney
hereinbefore contained, or of any act, matter, or
thing in relation thereto. In witness, &c.
The Schedule above referred to.
Particulars of the leasehold properties.
INDEX
The figures in thick type refer to the Sections of the Partnership
Act, 1890.
Account
of profits after dissolution, right of partner to, 42, 121, 128,
129.
Accounts
duty of partners to render, 28, 87.
Actions
by and against partners in name of firm, 135 seq
by firm, discovery of partners' names in, 136.
against firm, service in writ in, 137.
appearance cf partners in, 138.
between a partner and a firn', 140.
by trustee and solvent partners, 145.
Administration
of partnership estates, 147 seq.
Admission
of partners, when binding on the firm, 15, 57.
Advances
by partner to partnership, his light to interest on, 24, 75.
Adventure
joint, 6.
Agency
of partner for the firm, 5, 27.
right of partner to contribution independent of, 77.
principle of, applied to liability of firm for wrongful acts of
partners, 49.
rule of, against undisclosed profits, applies to partnership, 89.
200 INDEX.
Agent
remuneration of, by share of profits, 2, 11.
Agreement
restrictive, between partners, inoperative if not notified, 8, 39.
Annuity
receipt of, from profits of business, does not create partnership,
2,12.
Arbitration
one partner cannot bind firm by submission to, 35.
clause in articles, power of arbitrator to award a dissolution
under, 98.
power to award a return of premium under, 120.
Assets
of partnership, final distribution of, 44, 130, 131.
purchaser of, is entitled to goodwill unless excepted by
implication, 111.
Assignee
not entitled to interfere in management of partnership, 31,
91.
Assignment
of share of profits, effect of, 79.
does not of itself dissolve partnership, 80.
of share in partnership, 31, 91, 33, 93.
Attachment
of debts owing from a firm, 140.
Authority
implied, of partners, 29 — 34.
Bank
number of partners in, may not exceed ten, 8.
Bankruptcy
creditor who has lent money for share of profits postponed in,
3, 19.
doctrine of holding out applies to administration in, 55.
of firm or partner, effect of, on agreement for conversion of
property, 70
of partner dissolves partnership, 33, 93.
bankrupt partner's estate not liable for subsequent debts of
firm, 36, 99.
bankrupt partner has no authority to bind the firm, 38, 101.
INDEX. -201
Bankruptcy — continued.
Scots law of, when applicable, 47, 133.
adjudication and process against firm in, 141.
, where there is an infant partner, 141.
Procedure against Partners in :
consolidation of proceedings under joint and separate
petitions, 143.
petition against one partner by creditor of firm, 143.
petition may be dismissed as to some respondents only,
143.
one trustee to be appointed of estates of partners in same
firm, 144.
of one partner, creditor of firm may prove in, for purpose
of voting, 144.
dividends of joint and separate properties to be declared
together, 145.
actions by trustee of bankrupt partner together with
solvent partners, 145.
Bankruptcy Act of 1883 as to administration of partnership
estates, 150 : see Joint and Separate Estates.
effect of separate discharge of partner in, 173.
Bill of Exchange. See Negotiable Instruments.
Bills of Exchange Act, 1882. . .30, n.
Books
partnership, custody of and access to, 24, 76.
, right to copy, 82.
Borrowing Money
authority of partners in trading firm, 33.
Bovtll's Act, 18.
Business
definition of, 7, 45, 133.
partnership, right of partner to take part in, 24, 76, 78.
■Charging Order
against share of partnerin partnership property for his separate
debt, 23, 71.
not a protected transaction within Bankruptcy Act, 1883... 74, n.
Child
of deceased partner, receiving share of profits, not liable for
partnership debts, 2, 11.
202 IShKX.
Commandite
partnership in, 18.
Common Ownership
of property does not necessarily create partnership, 5.
Companies
distinguished from ordinary partnerships, 7.
Companies Act, 1862.. .32.
partnerships unlawful under, 8.
Company
membership of, is not partnership, 1, 1, 7.
" Company "
use of, not an assumption of a corporate name, 23, 24.
Competition
of partner with firm, 30, 89, 90.
Contracts
partnership, specific performance of, not generally granted,"6.
Conversion
of real estate being partnership property, 22, 69.
of partnership property into separate property, and rice versa,
22, 69, 70.
fraudulent, of partnership property, 155, 156, 160, 163, 164.
Corporation
assumption of corporate name, whether punishable, 23.
whether corporation may trade in its corporate name where the
name infringes a trade name, 26.
Cost-Book Company
procedure against share of member in, for his separate debt,
72—74.
Costs]
incurred after dissolution, liability of dormant partners for, 59.
Court
winding-up of business by, 10G.
power of, upon dissolution, not excluded by clause in articles,
110.
definition of, 45, 132.
may dismiss petition against some respondents only, 143.
Credit '
of linn, partner cannot'pledge, for private[purposes, 7, 35.
INDEX. 203
Creditor
receiving share of profits, postponed till claims of other creditors
for value satisfied, 3, 19.
Creditors
of partner exceeding his authority, 48, 49.
notice of dissolution to, 98 — 100.
v of firm, may present petition against one partner, 143.
may prove in separate bankruptcy for purposes of
voting, 144.
joint and separate, 147, 150, 169.
partners may not prove in competition with, 158. ,
rights of, against estate of deceased partner, 168.
Customers
dealing with old, by vendor of business, 113.
by outgoing partner, 114.
Death
dissolution of partnership by, 33, 93, 36, 99.
of partner after writ and appearance in action against firm,
138.
Debt
receipt of, by instalments does not create partnership, 2, 11.
power of partner to accept shares in satisfaction of, 35.
separate judgment, of partner, procedure against partnership
property for, 23, 71.
share of retiring or deceased partner is a, 43, 130.
Debts
due to firm, partner's power to give receipts for, 30.
partnership, not joint and several, 42: see Joint and Separate
Estates.
liability of partners for, 9, 41.
retiring partner not liable for, where contracted after his
retirement, 36, 99.
owing by firm, attachment of, 140.
Deed
partner cannot bind firm by, without express authority, 34.
Directors
i of numerous partnerships, limited authority of, 32.
Discovery
of individual partners in action by firm, 136.
204 INDUS.
Dissolution of Partnership
liabi ity of dormant partner for costs incurred after, 59.
by retirement of partner, 32, 92.
by bankruptcy, &c, 33, 93.
by death, 33, 93.
by assignment of share, 33, 93.
by the partnership business becoming unlawful, 34, 93.
by the Court for lunacy, misconduct, &c, of a partner,
35, 94.
at suit of partner of unsound mind, 96.
what misconduct is ground for, 97.
rights of creditors against ostensible partners not affected by,
36, 98.
power of arbitrator to award under clause in articles, 98.
notification of, in Gazette, sufficient, 36, 98.
right of partners to notify, 37, 100.
authority of partners after, 38, 101.
application of partnership property upon, 39, 105.
appointment of receiver upon, 106.
sale of goodwill upon, 110.
use of partnership name after, whether it can be restrained, 115.
premature, apportionment of premium on, 40, 116.
on what principle apportionment to be made, quare, 119.
arbitrator may award return of premium under common arbi-
tration clause in articles, 120.
on ground of fraud, effect of, 41, 120.
profits after, right to account of, when capital improperly
retained in business, 42, 121.
final distribution of assets upon, 44, 130, 131.
Estate
of deceased partner, nature of its liability, 42.
not liable for partnership debts contracted
after death, 36, 99.
Estoppel
liability by " holding out " depends on principle of, 54.
by negligence, doctrine of, not applicable in case of fraud of
partner, 167.
Execution
issuable only upon a judgment against the firm, 23, 71.
against partnership property for partner's separate debt
abolished, 23, 71.
on judgment against partners in name of firm, 139.
INflJSX. 205
Executors
of deceased partner, duties of surviving partners who are, 126.
Expulsion
of partner, 25, 82.
Firm
definition of, and use of firm name, 4, 21 — 27.
is not a person in law, 21.
exclusive right of, to trade name, 24.
* actions by and against partners in name of, 135.
authority of partners as agents of, 5, 27 seq.
guaranties given for or to, 35.
cases where acts of one partner do not bind, 34.
partners bound by acts on behalf, 6, 35.
not bound by attempts of partner to use partnership credit for
private purposes, 7, 35.
effect of notice that acts of partner do not bind the, 8, 39.
liability of partners for debts of, 9, 41.
liability of, for wrongs, 10, 44.
liability of, ior fraud, &c. of partner in course of partnership
business, 10, 11, 44.
liability of, for money or property of third persons misapplied
by partners, 11, 44.
grounds of the liability in such cases, 48.
how far bound by admissions of partners, 15, 57.
assumption of debts by new, 17, 58, 61.
partner must not compete with, 30, 89, 90.
change in, does not affect rights of creditors without notice,.
36, 98.
not bound by acts of bankrupt partner, 38, 101.
judgment creditor of, not bound to resort first to partnership.
property, 108.
Eules of Court as to partners suing and being sued in name of,.
135 seq.
service of writ in action against, 137.
judgment against partners in name of, 139.
application of Eules to persons trading as a firm, 141.
creditor of, may present petition against one partner only,jl43.
creditors of, their limited right to prove in separate bank-
ruptcy of partners, 144.
creditors of, their exceptional right to prove against separate
estate in certain cases, 154.
creditors of, double proof by, against joint and separate estates.
in case of distinct contracts, 168, 171.
206
INDEX.
Firm Name
sole trader under, 141.
use of, in actions between firms having common member, 140.
Forms, 174.
France
law of, as to transactions analogous to "joint adventure," 7.
as to name of firm, 24.
as to administration of partnership estates, 153.
Fraud
in conduct of partnership business, liability of firm for, 10, 11,
44.
conversion of partnership property to partner's separate use by,
11, 44, 50, 155, 156, 160, 163, 164.
defrauded partner's lien when partnership dissolved for, 41,
120.
Garnishee Order
Ord. XLV. applies to firm notwithstanding residence abroad
of one or more partners, 140.
Gazette, London
effect of notice of dissolution in, 36, 98, 101.
Germany
law of, as to name of firm, 24.
as to administration of partnership estates, 153, 154.
Goods
implied authority of partner to buy, in usual course of business,
30, 33, 34.
Goodwill
as to seller of, receiving share of profits, 2, 12.
sale of, on dissolution of partnership, 110.
right of partner to order for sale of, 110.
passes under sale of " assets," unless excepted by implication,
111.
nature and incidents of, 113.
does not " survive," 114.
does not exist in solicitor's business, 115.
" (Ikoss Kkturns "
the sharing of, does not necessarily create a partnership, 5,
2, 10.
IS'hEX, 207
Guaranty
one partner cannot generally bind firm by, 35.
continuing, to or for firm, revoked by change in firm, 18, 62.
" Holding Out "
liability as partner by, 14, 53.
what amounts to, 55.
the rule applies to administration in bankruptcy, 55.
does not bind deceased partner's estate, 56.
does not apply to wrongs independent of contract,
56, 57.
liability of retired partner by, 56.
Illegality
of partnership business dissolves the partnership, 34, 93, 94.
Indemnity
right of partners to, 24, 75, 77.
Indian Contract Act
definition of partnership in, 3.
as to companies not subject to ordinary law of partnership, 7.
effect of notice under, that firm will not be bound by acts of
partner, 40.
as to presumed equality of shares, 75.
on authority of partners after dissolution, 104.
as to joint and separate debts of partner, 151.
Indian Trusts Act, 53.
Infant
partner, receiving order against firm with, 141, 142.
Interest
right of partner to, on advances to firm, 24, 75.
allowed at option instead of profits on capital improperly
retained in business, 42, 122.
mixed claims for profits and interest not allowed, 129.
what percentage allowed, 129.
"Joint Adventure," 6.
Joint and Separate Estates
distribution of dividends of, 145.
rules for administration of, 147 seq.
general rule : the joint estate primarily liable for debts of firm,
the separate estates f6r separate debts, 147, 150.
208 1XVKX.
Joint and Separate Estates — continued.
principle of this doubtful : difference between legal and mer-
cantile rule, 151, 152.
partners must not compete with creditors, 158.
K.reeptional Bir/hts of Proof :
by creditors of firm against separate estates, 154.
by joint estate against separate estates or estate of minor
firm, 155.
by partners against joint estate or separate estates of other
partners, 158, 159.
by wife of partner, 159.
principles of the exceptional right in cases of fraudulent
conversion, 163 seq.
by joint creditors holding separate security, or conversely,
169.
Joint Tenancy
is not partnership, 2, 10.
Judgment. See Execution.
Land
being partnership property, how held, 20, 65, 68.
when it becomes partnership property, 69.
treated as personalty as between partners, 22, 69.
Lease
of partnership premises, one partner cannot renew, 81, n.
Liability
of incoming and outgoing partners, 17, 58, 59.
Lien
of partners on partnership property. 107.
against whom available, 108.
to what property it applies, 109.
of defrauded partners on assets when partnership dissolved for
fraud, 41, 120.
Limitations, Statute ok
operation of, against claims of deceased partner's representa-
tives, 130.
Loan
in consideration of rate of interest varying with profits, no
test of partnership. 2, 11.
to firm by wife of partner, 159.
INDEX.
209
Lunacy
as ground of dissolution, 35, 94.
injunction against lunatic partner pending action for dissolu-
tion, 95.
lunatic partner himself may sue by committee or next friend
for dissolution, 96.
Majority
power of, to decide differences, 24, 76, 81.
expel a partner, only by express agreement, 25, 82.
Marriage
of female partner, does not now dissolve partnership, 93, n. >
Married Woman
may prove against joint estate for money lent to husband's
firm, 159.
trading under firm name, cannot be made bankrupt on
judgment against her in firm name, 141.
Married Women's Property Acts, 1882 — 1893. ..93, n.
Misconduct
of partner, as ground for dissolution, 35, 95, 97.
Misrepresentation. See Fraud.
Money
implied power of partner in trading firm to borrow, 33.
misapplication of client's money by partner, when firm liable
for, 11, 44, 50.
partnership, property bought with, 21, 68.
Mortgage
equitable, of partnership property by partner, 30, 33.
legal, must be act of all the partners, 33.
Name
law as to use of, in business, 22, 23.
assumption of corporate, whether punishable, 23.
of firm, use of, after sale of goodwill, 113, 114.
dissolution, 115, 116.
Negligence
estoppel by, doctrine of, not applicable in case of fraud by
partner, 167.
210 INDEX.
Negotiable Instruments
partner in trading firm may issue, in name of firm, 30.
given in name of firm without authority, when firm not liable
on, 32.
Notice
of partner's want of authority, 8, 39.
to partner, when notice to the firm, 16, 58.
of dissolution, effect of, 36, 98, 99.
duty of partners to concur in, 37, 100.
question of, in cases of fraudulent appropriation of joint estate
by one partner, 160, 165.
Novation
on assumption of partnership debts by new firm, 62.
cannot be effected by agreement among partners without
creditor's assent, 62.
Option
to purchase outgoing partner's share, 42, 122, 12.1.
Partners
number of, limited in ordinary partnership, 8.
persons advancing money in consideration of share of profits,
&c, not necessarily, 2, 10, 11 : see Profits.
power of, to bind the firm as agents, 5. 27.
implied authority of, 29 — 34.
bound by acts on behalf of firm, 6, 35.
attempts by, to use credit of firm for private purposes, 7. 35.
may restrict authority of any partner by notice, 8, 39.
semble, not by mere agreement known to the creditor, 40.
admissions by, effect of, 40, 41.
liability of, for debts of firm, 9. 41.
notice to, when notice to firm, 16, 58.
liability of, for wrongs committed in course of partnership
business, 10, 44.
misapplication of third person's property by, 11, 44, 50.
test of firm's liability for wrongful acts of, 48.
improper employment of trust funds by, 13, 52.
persons liable as, by " holding out," 14, 53.
when retired partner may be so liable, 56.
liabilities of outgoing and incoming, on change of firm, 17,
58—62.
continuance of business by surviving, presumed to be on old
terms, 27, 84.
INDEX. 211
Partners — continued,
misconduct of, as ground for dissolution, 35, 95, 97 : see
Dissolution.
authority of, after dissolution, 38, 101 : see Dissolution.
rights of, as to application of partnership property upon
dissolution, 39, 105.
lien of, on partnership property, 107.
its nature and extent, 107 — 109.
rights of, as to goodwill, 110.
to restrain use of partnership name, 115.
where partnership dissolved for fraud, 41, 120.
right of, to account of profits made after dissolution with
capital improperly retained, 42, 121.
purchase of shares of outgoing, under option in articles, 42,
122, 125.
claims against continuing, qua executors or trustees, 125, 126.
surviving, not trustees for deceased partner's share, 130.
may sue and be sued in name of firm, 135, 136.
so suing, must disclose names on demand of defendant, 136.
so sued, service of writ upon, 137.
appearance of, individually, 138.
appearance under protest of persons served as, 138, 139.
judgment against, in name of firm, execution upon, 139.
charging order against share of partner in partnership property,
for separate debts, 23, 71, 72.
proceedings in bankruptcy against, 143 seq : see Bankruptcy.
administration of estates of, 147 seq. : see Joint and Separate
Estates.
fraudulent conversion of partnership property to their private
use by, 155, 156, 160, 163, 164.
must not prove in competition with creditors of firm, 158.
effect of separate discharge of, in bankruptcy, 173.
Relations of Partners to one another, 63 seq.
terms of partnership variable only by consent, 19, 63.
conversion of partnership into several property or vice
versa, 22, 69.
shares of, in partnership property, 71, 24, 77.
presumed equal, 24, 75, 77.
right of, to indemnity, 24, 75, 77.
to interest on advances to partnership, 24, 75.
to take part in business, 24, 76.
not entitled to remuneration, 24, 76.
power of majority among, to decide differences, 24, 76, 81.
consent of all necessary for change of nature or place of
business, 24, 76, 81.
P2
212 INDEX.
PARTNERS — routi mi fll.
Relations of 1'urinn-s to one another — roidirmeil.
consent of all necessary for introduction of new partner,
24, 76, 79.
right of, to inspect and copy books, 24, 76, 82.
none can be expelled save under express power, 25, 82.
retirement from partnership, when allowed, 26, 83.
duty of, to act for common advantage, 28, 87.
to render accounts, 28, 87.
to account to firm and not make undisclosed
profits, 29, 88.
not to compete with firm, 30, 89, 90.
conduct of, as ground for dissolution, 97.
right of, to notify dissolution, 37, 100.
application of Rules of Court to actions between co-
partners, 140.
Estate, of Deceit-serf Partner:
cannot be made liable on doctrine of " holding out," 56.
not liable for subsequent debts of firm, 36, 99.
when entitled to share of subsequent profits, 42, 121, 122.
duty of, to surviving partners, 126.
deceased partner's share is a debt due from the firm, 43,
130.
claims of, against surviving partners subject to Statute of
Limitations, 130.
rights of creditors against, 16s.
administration of : see Joint and Separate Estates.
Partnership
definition of, 1, 1 — 3.
distinct from common ownership, o.
and from sharing gross returns. ">.
number of members limited by Companies Act. S.
rule in Co.r v. HH.-mnn, 12. 17, 18.
Act to amend Law of, 18.
debts, liability of partners for, 9. 41.
impioper employment of trust moneys in, 13, 52.
I en us of, can only be varied by consent of all the partners, 19, 63.
business, rights and duties of partners in relation of, 19, 63 seq.
property, power of partners to dispose of, 20, 65 seq. . see
Partnership Property.
business, differences as to matters in, to be decided by majority,
24, 76, 81.
business, nature or place of, not to be changed without consent
of all partners, 24, 76.
JXDEX. 213
PAKTNEESHIP — ctmti-lllteil.
books, custody of and access to, 24, 76.
retirement of partners from, 26, 83.
continuance of, after lapse of term, 27, 84.
rights of assignee of share in, 31, 91.
how dissolved, 32 seq., 92 : see Dissolution of Partnership.
Partnership Property
implied authority of partners to sell or pledge, 33.
what it is, 20, 65.
customary valuation of, binding, 64.
interest of partners in, 69.
treatment of land which is, 22, 69.
conversion of, into several property of partners, 69.
what is share of partners in, 71.
charging order upon interest of partner in, upon judgment for
his separate debt, 23, 71.
rights of partners as to application of, 39, 105.
partners' lien upon, 107.
creditors of firm have no specific right against, until taken in
execution, 109.
execution against, upon judgment against partners in name of
firm, 139.
fraudulent conversion of, to partner's private use, 155, 160,
163, 164.
rights of separate creditors holding security upon, 169.
Part-ownership
distinguished from partnership, 5, 2, 10.
Patents, Designs and Teade Marks Act, 1883. ..25.
Personal Estate
land, held as partnership property, is such as between the
partners, 22, 69.
Pledge
of partnership property, implied authority of partner as to, 33.
Premium
paid on entering partnership, apportionment of, on premature
dissolution, 40, 116.
arbitrator may award a return of, under common arbitration
clause in articles, 120.
214 INDEX.
Profits
no partnership without division of, 4.
but sharing profits is not conclusive evidence of partners!;,?,
2, 10.
as to agent remunerated by share of, 2, 11.
widows or children of partners receiving share of, 11.
seller of goodwill receiving share of, 2, 12.
contract to pay fixed sum out of, 11.
creditor receiving share of, postponed to others, 3, 19.
statutory rule as to persons advancing money in consideration
of share of, 3, 19.
this protects only hona fide loans, 15, 20.
rule as to sharing of, by partners, 24, 75, 77.
assignment by partner of share of, its effect, 79.
does not of itself dissolve partnership, 80.
partners must account for, to firm, 29, 88.
after dissolution, right to account of, 42, 121, 128, 129.
claim for such account must be distinct and single, 128.
mixed claims for profits and interest not allowed, 129.
Proof
rights of, in administration of partnership estates : ate Bank-
ruptcy; Joint and Separate Estates.
Property
partnership, conversion of, 22, 69.
Eatification
of partner's unauthorized dealings with partnership funds, 165.
Eeceipt
power of partner to give, 34.
Eecetver
appointment of, after dissolution, 106, n.
Eegistration
under Companies Act, 8, 9.
Eelease
by partner, firm bound by, i>4.
Eemdneration
partner not entitled to, for acting in partnership business, 24,
76, 79.
Eepresentation
made by partner, effect of, 15, 57.
INDEX. 215
Retirement
of partner from partnership at will, 26, 83.
partnership dissolved upon notice by one partner of his, 32, 92.
liability of partner after, 56, 36, 99.
Returns
gross, sharing of, 5, 2, 10.
Rules of Court
procedure against partnership property for a partner's separate
judgment debt, 73, 74.
as to actions in name of firm, 135, 136.
discovery of partners' names in action by firm, 138.
service of writ in action against firm, 137.
appearance of partners, 138.
under protest of a person served as a partner,
138, 139.
execution upon judgment against firm, 139.
garnishee orders, 140.
Rules apply to actions between co-partners, and to person
trading as a firm, 140, 141.
do not allow adjudication against firm in firm name, 141.
as to service out of the jurisdiction, 142.
Sale
of partnership property by partner, 33.
Scotland
law of, as to "joint adventure," 6.
treats the firm as a person, 22.
as to liability of partners for debts of firm, 43.
as to administration of partnership estates, 152.
bankruptcy of partner or of the firm in, 47, 133.
partner domiciled in cannot be sued under Ord. XXfVTIlA.
r. 11. ..141.
Security
rights of joint creditor holding separate, or separate creditor
holding joint, 169.
Separate Estate : see Bankruptcy ; Joint and Separate
Estates.
Separate Trade
between a partner and the firm, 155, 159.
Servants
authority of partner as to hiring and dismissal of, 30, 34.
receiving share of profits, not liable for partnership debts, 2, 11.
210 LVD EX.
Shaee
of partner in partnership property, what is, 71.
effect of assignment of, 31,
91.
._. how ascertained, 130.
of profits after dissolution, 42, 121, 128, 129.
Shakes
in partnership, presumed equality of, 24, 75, 77.
may be made transferable by express agreement
between partners, 80.
of retiring or deceased partners are debts due from firm, 43, 130.
Solicitor
employment of to defend actions, 34.
no goodwill in business of, 115.
implied authority of, in partnership matters, 48.
Specific Performance
of partnership contract, not generally granted, 6.
Sub-partnership
creation and effect of, 80.
Surviving Partners
continuance of business by, presumed to be on old terms, 27,
84.
duty of, to representatives of deceased partner. 42, 122, 1'26.
are not, as such, trustees, 130.
Switzerland
law of, as to administration of partnership estates. 153.
Torts: -w Wrongs.
Trade Mxkk
relation of, to trade name. 24.
Trade Names
use of, and exclusive right to. 22 — 25.
foreign laws as to. 24.
cannot exist apart from actual business, 27.
Timuxo Partnerships, 20.
TlilTNT
breach of. by partner employing trust funds in partnership
business, 13, 52.
INDEX. 217
Trustee
mixed duties of partner who is, 126.
surviving partner as such, is not, 130.
one only appointed of estates of partners in same firm, 144.
actions by, jointly with solvent partners, 145.
Unlawful
partnership dissolved on business becoming, 34, 93.
Valuation
of partnership property, firm bound by accustomed mode even
against articles, 64.
Vendor
rights and duties of, upon sale of goodwill, 110.
Widow
of deceased partner, receiving share of profits, not liable for
partnership debts, 2, 11.
Winding-up
of business by the Court, 106 : see Goodwill ; Joint and
Separate Estates.
Writ
service of, in action against firm, 137.
■ out of the jurisdiction, 142.
Wrongs
liability of firm for, 10, 44.
partner's liability for, joint and several, 12, 44.
do ctrine of " holding out " not applicable to, 56.
BRADBUBY, AGNEW, & CO. LD., PRINTERS, LONDON AND TONBRIDGE.
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Cripps-Day's Adulteration (Agricultural Fertilisers and Feeding
Stuffs). — By Feahois H. Crtpps-Day, Esq., Barrister-at-Law.
Royal 12mo. 1894. 5s.
ADVOCACY. — Harris' Hints on Advocacy.— Conduct of Cases, Civi]
and Criminal. Classes of Witnesses and Suggestions for Cross-
examining them, &c, &c. By Richaed Haeeis, Q.C. Eleventh
Edition, with an Introduction. Royal 12mo. 1897. Is. 6d.
"Full of good sense and just observation. A very complete Manual of the
Advocate's art in Trial by Jury." — Solicitors' Journal.
" Deserves to be carefully read by the young barrister whose career is yet
before him." — Law Magazine.
AFFILIATION,— Bott's Manual of the Law and Practice in
Affiliation Proceedings, with Statutes and Forms, Tableof Gesta-
tion, Forms of Agreement, &o. By W. Holloway Bora, Solicitor.
Demy 12mo. 1894. 6s.
AGRICULTURAL LAW,— Dixon.— Vide "Farm."
Spencer's Agricultural Holdings Acts, 1883— 1900,— Second
Edition. By Atjbbey J. Spenceb, Esq., Barrister-at-Law.
(In the press.)
ANGLO-INDIAN CODES.— Stokes's Anglo-Indian Codes.— By
Whitley Stokes, LL.D. 2 Vols. Demy 8vo. 1887-88. 31. 5s.
First and Second Supplements to the above. 1891. 6*. 6d.
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ANNUAL COUNTY COURT PRACTICE.— The Annual County
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ANNUAL DIGEST.— Mews'.— Vide "Digest."
ANNUAL LIBRARY (LAWYER'S):—
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ANNUAL PRACTICE (THE).— The Annual Practice. 1901. Edited
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the Supreme Court; and F. A. Strtngeb, of the Central Office.
2 vols. 8vo. (Nearly ready.) Net 15s.
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" A book which every practising English lawyer must have." — Law Quarterly.
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" Every member of the bar, in practice, and every London solicitor, at all events,
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ANNUAL STATUTES.— Le\y.— Vide "Statutes."
ARBITRATION.— Mozley-Stark's Duties of an Arbitrator underthe
Workmen's Compensation Act, 1897.— With Notes on the Act
and Rules, and Appendices containing the Act, a selection from the
Workmen's Compensation Rules, 1898, and the Medical Referees'
Regulations. By A. Mqzley-Stark, Solicitor. Roy. 12mo. 1S98. 6s.
Russell's Treatise on the Power and Duty of an Arbitrator,
and the Law of Submissions and Awards-, with an Appendix
of Forms, and of the Statutes relating to Arbitration. By Francis
Russell. Eighth Edition. By Edward Pollock, Esq., an Official
Referee of the Supreme Court of Judicature, and the late Herbebt
Russell, Esq., Barrister-at-Law. Royal 8vo. 1900. 30s.
" The execution of the work leaves nothing to be desired." — Law Times,
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"After a careful examination of the way in which the work has been done,
we may say that nothing which the practitioner will want to know seems to have
been omitted." — Law Journal, April 21, 1900.
ARCH ITECTS.— Vide " Civil Engineers."
AVERAGE.— Hopkins' Hand-Book of Average.— Fourth Edition.
By Manley Hopkins, Esq. Demy Svo. 1884. 11. Is.
Lowndes' Law of General Average. — English and Foreign.
Fourth Edition. By Richard Lowndes, Average Adjuster. Author
of " The Law of Marine Insurance," &o. Royal 8vo. 1888. 11. 10s.
" The most complete store of materials relating to the subject in every par-
ticular."— Law Quarterly Review.
AUCTIONEERS.— Hart's Law relatingto Auctioneers.— By Hebeb
Hart, Esq., LL.D., Barrister-nt-Law. Demy 8vo. 1895. 7s. 6d.
BANKING.— Walker's Treatise on Banking Law.— Seoond Edition.
By J. D. Walker, Esq., Q.C. Demy Svo. 1886. 15s.
BANKRUPTCY.— Lawrence's Precedents of Deeds of Arrange-
ment between Debtors and their Creditors ; including Forms,
with Introductory Chapters, also the Deeds of Arrangement Acts,
1887 and 1890, with Notes. Fifth Ed. By Arthur Lawrence,
Esq., Barrister-at-Law. Demy Svo. 1900. 7s Gd.
" ConoiBe, practical, and reliable."— Law Times.
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119 & 120, CHANCERY LANE, LONDON, "W.O. S
B A N K R U PTCY— continued.
Williams' Law and Practice in Bankruptcy. — Comprising the
Bankruptcy Acta, 1883 to 1890, the Bankruptcy Rules and Forms,
1886, 1890, the Debtors Acts, 1869, 1878, the Bankruptcy (Discharge
and Closure) Act, 1887, the Deeds of Arrangement Act, 1887, and
the Rules thereunder. By the Right Hon. Sir Roland L. Vauqhan
"Williams, a Lord Justice of Appeal. Seventh Edition. By Edward
Wit. Hansell, Esq., Barrister-at-Law. Roy. 8vo. 1898. 30s.
" The leading text-book on bankruptcy."— Law Journal.
BASTARDY.— Botl.— Fide "Affiliation."
BILLS OF EXCHANGE.— Campbell's Ruling Cases. Vol. IV.—
Vide "Digests," p. 10.
Chalmers' Digest of the Law of Bills of Exchange, Promissory
Notes, Cheques and Negotiable Securities. Fifth Edition.
By His Honour Judge Chalmebs, Draughtsman of the Bills of
Exchange Act. Demy 8vo. 1896. 18s.
" The leading book on bills of exchange ; it is well known, -widely used, and
highly appreciated." — Law Journal.
" Each section having appended to it illustrations in the nature of short statements
of decided cases. These are prepared -with that skilful conciseness of -which the
learned Judge is a master." — Law Times.
BILLS OF LADING.— Leggett's Treatise on the Law of Bills of
Lading. — Second Edition. By Eugene Leggett, Solicitor and
Notary Public. Demy 8vo. 1893. 30s.
Pollock's Bill of Lading Exceptions. — By Henby E. Pollock.
Second Edition. Demy 8vo. 1896. 10s. 6d.
BOOK-KEEPING.— Matthew Hale's System of Book-keeping for
Solicitors, containing a List of all Books necessary, -with, a compre-
hensive description of their objects and uses for the purpose of
Drawing Bills of Costs and the rendering of Cash Accounts to clients ;
also showing how to ascertain Profits derived from the business ; with
an Appendix. Demy 8vo. 1884. 5s. 6d.
" The most sensible, useful, practical little work on solicitors' book-keeping
that -we have seen."-!-£aw Students' Journal.
BUILDING SOCIETIES.— Wurtzburg on Building Societies.—
The Law relating to Building Societies, with Appendices containing
the Statutes, Regulations, Act of Sederunt, and Precedents of Rules
and Assurances. Third Edition. By E. A. Wubtzbubg, Esq.,
Barrister-at-Law. Demy 8vo. 1895. 15s.
" Will be of use not only to lawyers but also to secretaries and directors of
building societies. It is a carefully arranged and carefully written book." —
Law Times.
CANALS,— Webster's Law Relating to Canals.— By Robebt G-.
Webster, Esq., Barrister-at-Law. Demy 8vo. 1885. 11. Is.
CARDINAL RULES.— -See "Legal Interpretation."
CARRIERS.— Carver's Treatise on the Law relating to the Car-
riage of Goods by Sea. — Third Edition. By Thomas Gilbert
Caevee, Esq., Q.C. Royal 8vo. 1900. 11. 16s.
"A recognized authority." — Solicitors 7 Journal.
" A careful and accurate treatise." — Law Quarterly Review.
Macnamara's Digest of the Law of Carriers of Goods and Pas-
sengers by Land and Internal Navigation. — By Walteb Henet
Maonamaea, Esq., Barrister-at-Law, Registrar to the Railway
Commission. Royal 8vo. 1888. 11. 8s.
" A complete epitome of the law relating to carriers of every ehsa."— Railway
Press.
CHAMBER PRACTICE.— Archibald's Practice at Judges' Cham-
bers and in the District Registries; with Forms of Summonses
and Orders. Second Edition. By W. F. A. Archibald, Esq., Bar-
rister-at-Law, and P. E. Vizard, of the Summons and Order De-
partment. Royal 12mo. 1886. 16*.
*«* All standard law Works are kept in Stock, in law calf and other Imdmgs.
a 2
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CHANCERY, and Vide "Equity."
Daniel I's Chancery Practice, — The Practice of the Chancery Division
of the High Court of Justice and on appeal therefrom. Seventh
Edition. By Cecil C. M. Dale, C. W. Greenwood, and Sydney
E. Williams, Esqrs., Barristers-at-Law. 2 vols. (In ihe press.)
Daniell's Forms and Precedents of Proceedings in the Chancery
Division of the High Court of Justice and on Appeal there-
from, Fifth Edition. By Chables Buenbt, B.A. Oxon., a
Master of the Supreme Court. Royal 8vo. (In the press.)
Mews' Digest.— Vide "Digests," p. 11.
CHARTER PARTIES.— Carver.— Vide "Carriers."
Leggett's Treatise on the Law of Charter Parties,— By Eugene
Leggett, Solicitor and Notary Public. Demy 8vo. 1894. 25*.
CHILDREN.— Hall's Law Relating to Children. By W. Clabke
Hall, Esq., Barrister-at-Law. Demy 8vo. 1894. 4 S .
CHURCH LAW.— Whitehead's Church Law.-Being a Concise
.Dictionary of Statutes, Canons, Regulations, and Decided Cases
affecting the Clergy and Laity. Second Edition. By Benjamin
Whitehead, Esq., Barrister-at-Law. Demy 8vo. 1899. 10*. 6d
A perfect mine of learning on all topics ecclesiastical."— Daily Telegraph.
The Statutes relating to Church and Clergy, -with Preface
and Index. By Benjamin Whitehead, Esq., Barrister-at-Law
.Royal 8vo. 1894. gj
CIVIL ENGINEERS.-Macassey and Strahan's Law relating to
Civil Engineers, Architects and Contractors.— With a Chapter
on Arbitrations Second Edition. By L. Livingston Macassey and
J. A. bTEAHAN, Esqrs., Barristers-at-Law. Demy8vo. 1897. 12s. 6d.
C0L ^L SIC ^ NS, t Tl5? r i den 'l Treatise onthe Law of Collisions at
Sea.— Fourth Edition. By Reginald G. Mabsden, Esq. , Barrister-
at-Law. Demy 8vo. 1897. \i g s
" ^,w S i e ",' S b °° k Stands without a rival."-^ Quarkrbi Review.
May be relied upon as a trustworthy authority."— SK/,^ Gazette.
COMMON LAW-Chitty's Archbold's Practice. Fourteenth
Edition By Thomas Whles Chitty, assisted by J. St. L. Leslie,
Esqrs Barristera-at-Law. 2 vols. Demy 8vo. 1885. {Published
at 61. 13*. 6rf.) Reduced to net, 30*.
Chitty's Forms.— Vide " Forms."
E dln^ ^ Ut 'ir eS of Common Law.-Specially prepared for Stu-
dents. By Maetin Elliott, Esq., Barrister-at-Law. Demy 8vo.
" Will prove of the greatest assistance to students."-.!™ Times. ^ ^'
Mews' Digest.— Tide "Digests," p. 11.
Cartel ZnY ri # h ^% P ° SSeSS i on in the C ° mm °n Law-
bvR S^Lx™ 7 £ V ° ZL0 . aK > Bart - > Barrister-at-Law Part III.
byK. S. Weight, Esq., Barrister-at-Law. 8vo. 1888. 8*. 6d
Shirley.— Vide "Leading Cases."
S oiJmiwSSttl ^,S ,mm ? n , ^-f 01 fta^tfaners and Students,
and E„! ^damentaJ Principles, with useful Practical Rules
ByC T S Z™ iL ^ ^ SM f ?' BCL > Q-°- Eleventh Edit.
y „ ™, &PUKLDr °. Es q., Barrister-at-Law. Demy 8vo 1898 15*
of JtSoSyU- cJnfen^vS^^' *"J*™ the uaefuln!i
Law Quarterly B°r7Z-, olm, - nt ' u y S ^V. but as a handy book of reference."-
C0 WY LAW-Hamilton's Manual of Company Law By
• • I; I' /^ • ,D - L ° nd - Q -°- Seoo ^Edit. P ^prtZatim 7 )
» Ml standard Law JVorks are kept in Stock, in law calf and other bindings.
119 & 120, CHANCERY LANE, LONDON, W.O. 5
COMPANY LAW— continued.
Palmer's Company Precedents, — For use in relation to Companies
subject to the Companies Acts.
Part I. COMPANY FORMS. Arranged as folio ws :— Promoters,
Prospectuses, Underwriting, Agreements, Memoranda and Articles
of Association, Private Companies, Employes' Benefits, Resolutions,
Notioes, Certificates, Powers of Attorney, Debentures and Debenture
Stock, Banking and Advance Securities, Petitions, Writs, Pleadings,
Judgments and Orders, Reconstruction, Amalgamation, Special Acts.
Witt Copious Notes and an Appendix containing the Acts and Rules.
Seventh Edition. By Francis Beaufort Palmee, Esq., Barrister-at-
Law, assisted by the Hon. Chaeleb Maonaghten, Q.C., and Aethue
John Chittt, Esq., Barrister-at-Law. Royal 8vo. 1898. 36s.
" No company lawyer can afford to be without it." — Law Journal.
Part II. WINDING-TIP FORMS AND PRACTICE. Arranged as
follows : — Compulsory Winding-TJp, Voluntary Winding-Up,Wind-
ing-TJp under Supervision, Arrangements and Compromises, with
Copious Notes, and an Appendix of Acts and Rules. Eighth Edition.
By Francis Beaotoet Palmee, assisted by Fbank Evans, Esqrs.,
Barristers-at-Law. Royal 8vo. 1900. 32s.
" Palmer's ' Company Precedents ' is the book par excellence for practitioners.
There is nothing we can think of which should be within the covers which we do
not find." — Law Journal.
Part III. DEBENTURES AND DEBENTURE STOCK, including
Debentures, Trust Deeds, Stock Certificates, Resolutions, Prospectuses,
Writs, Pleadings, Judgments, Orders, Receiverships, Notices, Mis-
cellaneous. With Copious Notes. Eighth Edition. By Eeancis
Beaueobt Palmee, Esq., Barrister-at-Law. Royal 8vo. 1900. 21s.
" The result of much careful study Simply invaluable to debenture-
holders and to the legal advisers of such investors." — Financial News.
"Embraces practically the whole law relating to debentures and debenture
stock. . . . Must take front rank among the works on the subject." — Law Times.
Palmer's Company Law. — A Practical Handbook for Lawyers and
Business Men. Based on Lectures delivered in the Inner Temple
Hall at the Request of the Council of Legal Education. With an
Appendix containing the Companies Acts, 1862 to 1898, and Rules.
Second Edit. By Feancis Beaueobt Palmee, Esq., Barrister-at-Law,
Author of "Company Precedents," &c. Royal 8vo. 1898. 12s. 6d.
" The work is a marvel— for clearness, fulness, and accuracy, nothing could
be better." — Law Notes.
" Of especial use to students and business men who need a clear exposition by
a master hand." — Law Journal.
" The subject is dealt with in a clear and comprehensive manner, and in such
a way as to be intelligible not only to lawyers but to others to whom a knowledge
of Company Law may be essential." — Law Students' Journal.
"All the principal topics of company are dealt with in a substantial manner,
the arrangement and typography are excellent, and the whole of the Statute
Law— an indispensable adjunct— is collected in an appendix. Perhaps what
practising lawyers and business men will value most is the precious
quality Of practicality."— Law Quarterly Review.
" Popular in style, also accurate, with sufficient references to authorities to
make the book useful to the practitioner."— The Times.
Palmer's Companies Act, 1900, with Notes. By Francis Beaufoet
Palmee, Esq., Barrister-at-Law. (In preparation.)
Palmer's Private Companies and Syndicates, their Formation and
Advantages ; being a Concise Popular Statement of the Mode of Con-
verting a Business into a Private Company, and of establishing and
working Private Companies and Syndicates for Miscellaneous Pur-
poses. Fifteenth Edition. By F. B. Palmee, Esq., Barrister-at-
Law. 12mo. 1899. . ,*[<*, 1»;
Palmer's Shareholders, Directors, and Voluntary Liquidators
Legal Companion.— A Manual of Every-day Law and Practice for
Promoters, Shareholders, Directors, Secretaries, Creditors, Solicitors,
and Voluntary Liquidators of Companies under the Companies Acts,
1862 to 1898, with Appendix of useful Forms. Nineteenth Edit. By
F. B. Palmee, Esq., Barrister-at-Law. 12mo. 1900. Net, 2s. 6d.
*,* All standard law Works are kept in Stock, in law calf and other bindings.
6 STEVENS AND SONS, LIMITED,
COMPENSATION,— Cripps' Treatise on the Principles of the
Law of Compensation, Fourth Edition. By C. A. Ceipps, Esq.,
Q.C. Royal 8vo. 1900. U. 5s.
" An accurate and complete exposition of the law relating to compensation."
— Law Journal, June 9, 1900.
COMPOSITION DEEDS.— Lawrance.— We "Bankruptcy."
CONDITIONS OF SALE,— Webster,— Vide "Vendors and Pur-
chasers."
CONFLICT OF LAWS,— Campbell's Ruling Cases. Vol. V.— Vide
"Digests," p. 10.
Dicey's Digest of the Law of England with reference to the
Conflict of Laws,— By A. V. Dicey, Esq., Q.C.,B.C.L. With Notes
of American Cases, hy Professor Mooee. Royal 8vo. 1806. 11. 10s.
" One of the moBt valuable books on English law which has appeared for
some time. Thorough and minute in the treatment of the subject, cautious and
judicial in spirit, this work ie obviously the result of protracted labour." — The
Times.
CONSTITUTION.— Anson's Law and Custom of the Constitution.
By Sir William R. Anson, Bart., Barrister-at-Law. Demy 8vo.
Part I. Parliament. Third Edition. 1897. 12*. 6d.
Part II. The Crown. Second Edition. 1896. 14*.
CONTRACT OF SALE.— Blackburn,— Vide "Sales."
Moyle's Contract of Sale in the Civil Law.— By J. B. Moyle,
Esq., Barrister-at-Law. 8vo. 1892. 10«. 6d.
CONTRACTS.— Addison on Contracts.— A Treatise on the Law of
Contracts. 9th Edit. By Horace Smith, Esq., Bencher of the Inner
Temple, Metropolitan Magistrate, assisted by A. P. Pebceval Keep,
Esq., Barrister-at-Law. Royal 8vo. 1892. 11. 10s.
" This and the companion treatise on the law of torts are the most complete
works on these subjects, and form an almost indispensable part of every lawyer's
library." — Law Journal.
Anson's Principles of the English Law of Contract. — By Sir
W. R. Anson, Bart., Barrister-at-Law. Ninth Edit. 1899. 10s. 6d.
Campbell's Ruling Cases. Vol. VI.— Vide " Digests."
Finch's Selection of Cases on the English Law of Contract, —
Second Edition. Roy. 8vo. 1896. 28s.
Fry. — Vide "Specific Performance."
Leake's Law of Contracts. — A Digest of Principles of the Law of
Contracts. Eourth Edition. By A. E. Randall, Esq., Barrister-
at-Law. {In the press.)
" Complete, accurate, and easy of reference." — Solicitors 1 Journal.
" Clear, concise, accurate, and exhaustive." — Law Times.
Pollock's Principles of Contract. — Being a Treatise on the General
Principles relating to the Validity of Agreements in the Law of
England. Sixth Edition. By Sir Fbedericx Pollock, Bart. , Bar-
rister-at-Law, Author of "The Law of Torts," "Digest of the
Law of Partnership," &o. Demy Svo. 1S94. 28s.
" A work which, in our opinion, shows great ability, a discerning intellect, a
comprehensive mind, and painstaking industry." — Law Journal.
CONVEYANCING.— Brickdale & Sheldon.— Vide "Land Transfer."
Dart. — Vide " Vendors and Purchasers."
Dickins' Precedents of General Requisitions on Title, with Ex-
planatory Notes and Observations. Second Edition. By Hebbeet
A. Dickins, Esq., Solioitor. Royal 12mo. 1898. 5s.
" Wo cannot, do bettor than advise every lawyer with a conveyancing practice
to purchase tho little book and place it on his shelves forthwith." — Law Notes.
*,,* All standard Law Works are kept in Stock, in law calf and otlier bindings.
119 & 120, CHANCERY LAN E, LONDON, W.O. 7
CONVEYANCING— continued.
Greenwood's Manual of the Practice of Conveyancing, showing
the present Practice relating to the daily routine of Conveyancing in
Solicitors' Offices. To which are added Concise Common Forms in
Conveyancing. — Ninth Edit. Edited by Harry. Greenwood, M.A.,
LL.D., Esq., Barrister-at-Law. Roy. Svo. 1897. 20s.
" The ninth edition will maintain the reputation which the work has long ago
acquired of being one of the best expositions ■which the English lawyer possesses
of the present practice relating to the daily routine of conveyancing in solicitors'
offices. We have tested it at various points of a somewhat critical character, and
have no hesitation in pronouncing it up to date and in every way reliable as a
guide to modern conveyancing practice." — Literature.
" "We should like to see it placed by his principal in the hands of every articled
clerk. One of the most useful practical works we have ever seen." — Law Stu. Jo.
Hood and Challis' Conveyancing and Settled Land Acts, and
some other recent Acts affecting Conveyancing. With Commentaries.
By H. J. Hood and H. W. Challis. Eifth Edition. By H. W.
Cttat.t.ts, assisted by J. I. Stirling, Esqrs., Barristers-at-Law.
Royal 8vo. 1898. * 18s.
" That learned, excellent and useful work."— Law Times.
"This is the best collection of conveyancing statutes with which we are
acquainted. . . . The excellence of the commentaries which form part of this
book is so well known that it needs no recommendation from us." — Law Journal.
Jackson and Gosset's Precedents of Purchase and Mortgage
Deeds. — By W. Howland Jackson and Thorold Gosset, Esqrs.,
Barristers-at-Law. Demy 8vo. 1899. 7s. 6d.
" Not the least merit of the collection is that each Precedent is complete in
itself, so that no dipping about and adaptation from other parts of the book are
necessary." — Law Journal.
%* This forms a companion volume to " Investigation of Title" by
the same Authors, vide p. 17.
Palmer. — Vide " Company Law."
Prideaux's Precedents in Conveyancing — With Dissertations on
its Law and Practice. 18th Edit. By John Whttcombe and
Benjamin Lennahd Cheery, Esqrs., Barristers-at-Law. 2 vols.
Royal 8vo. 1900. 3/. 10s.
" 'Prideaux ' is the best work on Conveyancing." — Law Journal.
" Accurate, concise, clear, and comprehensive in scope, and we know of no
treatise upon Conveyancing which is so generally useful to the practitioner." —
Law Times.
" Becent legislation has compelled the Editor to re-write some of the pre-
liminary dissertations. He has evidently taken great pains to incorporate the
effect of the Land Transfer Act of 1897."— The Times.
CORONERS. — Jervis on Coroners.— The Coroners Acts, 1887 and
1892. With Forms and Precedents. Sixth Edition. By R. E.
Melsheimer, Esq., Barrister-at-Law. Post 8vo. 1898. 10s. 6d.
" In all respects adequate and exhaustive." — Law Times.
COSTS. — Johnson's Bills of Costs in the High Court of Justice
and Court of Appeal, in the House of Lords and the Privy Council ;
with the Scales of Costs and Tables of Pees in use in the Houses of
Lords and Commons, relative to Private Bills ; Election Petitions,
Parliamentary and Municipal. Inquiries and Arbitrations under the
Lands Clauses Consolidation Act, the Light Railway Act and other
Arbitrations. Proceedings in the Court of the Railway and Canal
Commission, in the County Court and the Mayor's Courts. The
Scales of Costs and Tables of Fees in use in the Court of Passage,
Liverpool. Conveyancing Costs and Costs between Solicitors and
their Clients ; with Orders and Rules as to Costs and Court Fees,
and Notes and Decisions relating thereto. By Horace Maxwell
Johnson, Esq., Barrister-at-Law. Second Edition. Royal 8vo.
1900. ll - 15s -
" It is difficult to conceive how any costs clerk or solicitor can go wrong with
a work of this kind to guide him."— Law Times.
*' We consider the book marvellously accurate, and we are able to commend
it in all confidence. On the law of bills of costs the practitioner, let his business
be as wide as it may, wants nothing but such a work as the one before us." —
Law Notes.
%* AU standard Law Work are kept in Stock, in law calf and other Imdingi.
8 STEVENS AND SONS, LIMITED,
COSTS — continued.
Summerhays and Toogood's Precedents of Bills of Costs,
Seventh Edition. By Thobnton Toogood, Thomas Chables Sttmmeb-
hatb, and C. Gilbebt Babbeb, Solicitors. Royal 8vo, 1896. U. 10s.
Webster's Parliamentary Costs.— Private Bills, Election Petitions,
Appeals, House of Lords. Fourth Edition. By C. Cavanagh, Esq.,
Barrister-at-Law. Post 8vo. 1881. 20s.
COUNTY COURTS. — The Annual County Court Practice,
1900, — By His Honour Judge Shyly, Q.C. 2 vols. 8vo. 11. 5s.
" Invaluable to the County Court practitioner."— Law Journal.
COVENANTS.— Hamilton's Concise Treatise on the Law of
Covenants,— By G. Baldwin Hamilton, Esq., Barrister-at-Law
Demy 8vo. 1888. 7s. 6rf .
CRIMINAL LAW,— Archbold's Pleading, Evidence and Practicein
Criminal Cases.— With the Statutes, Precedents of Indictments, &c.
Twenty- second Edition. By William F. Cbaies and Guy Stephen-
son, Esqrs., Barristers-at-Law. Demy 8vo. 1900. 11. lis. 6d.
" Archbold ' is the one indispensable book for every barrister or solicitor who
practises regularly in the c rim inal Courts."— Solicitors' Journal, March 3, 1900.
Chitty's Collection of Statutes relating to Criminal Law.— (Re-
printed from ' ' Chitty' s Statutes.") With an Introduction and Index.
By W. E. Cbaies, Esq., Barrister-at-Law. Royal 8vo. 1894. 10*.
Disney and Gundrys Criminal Law.— A Sketch of its Principles
and Practice. By Henby W. Disney and Habold Gundby, Esqrs.
Barristers-at-Law. Demy 8vo. 1895. Is.Gd.
"We think we have here just what students want. The work is based upon a
perfect knowledge of the statute law, and is compiled from the best and most
recent authorities."— Law Times.
Kershaw's Brief Aids to Criminal Law.— With Notes on the Pro-
cedure and Evidence. By Hilton Kebshaw, Esq., Barrister-at-
Law. Royal 12mo. 1897. 3 S
Mews.— Vide "Digest."
Roscoe's Digest of the Law of Evidence in Criminal Cases
Twelfth Edition. By A. P. Peboeval Keep, Esq., Barrister-at-
Law. Demy8vo. 1898. \i_ \i S- gtf.
"To the criminal lawyer it is his guide, philosopher and friend. What
Boscoe says moBt judges will accept without question."— Law Times.
Russell's Treatise on Crimes and Misdemeanors,— Sixth Edit.
By Hobaoe Smith, Esq., Metropolitan Police Magistrate, and A. P
Peboeval Keep, Esq. 3 vols. Roy. 8vo. 1896. 5/. 15s. ed'.
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"Indispensable in every Court of criminal justice here and in our Colonies."
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Shirley's Sketch ofthe Criminal Law.— Second Edition. ByCHABLES
Stephen Hunter, Esq., Barrister-at-Law. Demy8vo. 1889. 7s. 6d.
Warburton,— Vide " Leading Cases." Thring Tide "Navy."
DEATH DUTIES.— Freeth's Acts relating to the New Death Duty,
with an Introduction, A Digest, Copious Notes, and an Appendix
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By Evelyn Fbeeth, Esq., Deputy-Controller of Legaoy and Succes-
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DECISIONS OF SIR GEORGE JESSEL.-Peter's Analysis and
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DIARY.— Lawyers' Companion (The) and Diary, and London and
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viations. Third Edit. By Heney G. Rawson and James F. Remnant,
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DIGESTS.-Campbell's Ruling Cases.-Arranged, Annotated 1 and
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Law Advocate of the Scotch Bar, assisted by other Members of the
Bar.' With American Notes by Ibvino Beowne, former ly . Editor of
the American Eeports, and the Hon. Leonaed A Jones. Royal 8vo.
1894^1900 Salfvellum, gilt top, net, each 25s.
The following Volumes have been published
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IX.— Defamation — Dramatic and
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ciples."— The British lit, -inc.
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Dale and Lehmann's Digest of Cases, Overruled, Not Followed,
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" Extremely well done, with abundance of headings and cross references . . .
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Michaelmas Term, 1865 to the end of 1890, with the places where
they are so cited. — By George John Talbot and Hugh Fort, Esqrs.,
Barristers-at-Law. Royal 8vo. 1891. 25s.
" This is an invaluable tool for the worker among cases."— Solicitors' Journal.
DISCOVERY,— Sichel and Chance's Discovery.— The Law relating
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and WiLLiAnCHANCE,Esqrs., Barristers-at-Law. Demy 8vo. 1883. 12s.
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Treatise on the Law of Distress, with an Appendix of Forms, Table
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Teobe Foster, Esqrs., Barristers-at-Law. Demy 8vo. 1889. 18s.
DISTRICT COUNCILS.— Chambers' Digest of the Law relating
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Kelly's French Law.— Vide "Marriage."
DOGS.— Lupton's Law relating to Dogs.— By Frkdebiok Lupton,
Solicitor. Royal 12mo. 1888. »»■
DOMESDAY BOOK AND BEYOND.— Three Essays in the Early
History of England. By Professor Maitland. 1897. 8vo. 15*.
EASEMENTS.— Campbell's RulingCases. Vol.X.— Fi<fe" Digests."
Goddard's Treatise on the Law of Easements.— By John Ley-
botjbn Goddabd, Esq., Barrister-at-Law. Fifth Edition. Demy
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" Has taken its place as a standard treatise." — Journal of British Architects.
" Nowhere has the subject been treated so exhaustively, and, we may add,
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Innes' Digest of the Law of Easements. Sixth Edition. By
L. C. Innes, lately one of the Judges of Her Majesty's High Court
of Judicature, Madras. Royal 12mo. 1900. 7s. Sd.
" Constructed with considerable care and pains." — Law Journal.
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ECCLESIASTICAL LAW— Phillimore's Ecclesiastical Law of the
Church of England. By the late Sir Robket PsrLunroRE, Bart.,
D.C.L. Second Edition, by his son Sir Waltee Geobge Prank
Phillimoee, Bart., D.C.L., assisted by C. F. jKurvrF.rr, B.C.L.,
LL.M., Barrister-at-Law. 2 vols. Royal 8vo. 1895. 31. 3s.
" The famous treatise of Sir Robert Phulimore will continue to hold a foremost
place in our legal literature."— Law Times.
" The task of re-editing Phillimore's ' Ecclesiastical Law ' was not an easy one.
Sir Walter Phillimore has executed it wirh brilliant success. He has brought to
the work all his father's subdued enthusiasm for the Church, he has omitted
nothing that lent value to the original treatise, he has expunged from it what
could be spared, and has added to it everything that the ecclesiastical lawyer
can possibly need to know." — Law Journal.
Whitehead's Church Law. — Being a Concise Dictionary of Statutes,
Canons, Regulations, and Decided Cases affecting the Clergy and
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Timis.
ELECTIONS.— Day's Election Cases in 1892 and 1893.— Being a
Collection of the Points of Law and Practice, together with Reports
of the Judgments. By S. H. Day, Esq., Barrister-at-Law, Editor
of " Rogers on Elections." Royal 12mo. 1891. 7s. 6d.
Hedderwick's Parliamentary Election Manual 1 A Practical
Handbook on the Law and Conduot of Parliamentary Elections
in Great Britain :md Ireland, designed for the Instruction and
Guidance of Candidates, Agents, Canvassers, Volunteer Assistants,
&o. Second Edition. By T. C. H. Hkdbebwick, Esq., Barrister-at-
Law. Demy 12mo. 1900. 10s. 6d.
" Clear and well arranged." — Law Quarterly Hevi/nt..
Hunt's Metropolitan Borough Councils Elections: A Guide to
the Mention of the. Miiyor, Aldermen, and Councillors of Metropolitan
Boroughs. By John Hunt, Esq., Barrister-at-Law. Demy 8vo.
1900. 3s. 6d.
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E LECTI O N S— continued.
Rogers' Law and Practice of Elections. —
Vol. I. Registration, including the Practice in Registration
Appeals; Parliamentary, Municipal, and Local Government; with
Appendices of Statutes, Orders in Council, and Forms. Sixteenth
Edition ; with Addenda of Statutes to 1900. By Maueioe Powell,
Esq., Barrister-at-Law. Royal 12mo. 1897. 11. Is.
" The practitioner will find within these covers everything which he can he
expected to know, well arranged and carefully stated." — Law Times.
_ Vol. II. Pabliamentaby Elections and Petitions ; with Appen-
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"The leading hook on the difficult suhjects of elections and election peti-
tions." — Law Times.
" A very satisfactory treatise on election law." — Solicitors' Journal.
Vol. III. Municipal and othee Elections and Petitions, with
Appendices of Statutes, Rules, and Forms. Seventeenth Edit. By
Samuel H. Day, Esq., Barrister-at-Law. Royal 12mo. 1894. Ills.
This Volume treats of Elections to Municipal Councils {including the
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District Councils, Boards of Guardians (within and without London),
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EMPLOYERS' LIABILITY.— Mozley-Stark.— Fi* "Arbitration."
Robinson's Employers' Liability under the Workmen's Com-
pensation Act, 1897, and the Employers' Liability Act, 1880 ;
with the Rules under the Workmen's Compensation Act, 1897,
By Aethue Robinson, Esq., Barrister-at-Law Second Edition.
Including Precedents of Schemes of Compensation nnder the "Work-
men's Compensation Act, 1897, certified by the Registrar of Friendly
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1898. 7s. Qd.
" This hook commences with a short but clear summary of the law of
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ENGLISH LAW.— Pollock and Maitland's History of English Law
before the time of Edward I. — By Sir Fbedeeicx Pollock, Bart.,
and Feed. W. Maitland, Esq., Barristers-at-Law. Second Edition.
2 vols. roy. 8vo. 1898. 40s.
EQUITY, and Vide CHANCERY.
Mews' Digest. — Vide "Digests," p. 11.
Seton's Forms of Judgments and Orders in the High Court of
Justice and in the Court of Appeal, having especial reference to
the Chancery Division, with Practical Notes. Sixth Edition. By
C. C. M. Dale, Esq., Barrister-at-Law, and W. T. Kino, Esq., a
Registrar of the Supreme Court. In 3 vols. (In the press.)
"A monument of learned and laborious accuracy." — Law Quarterly Review.
Smith's Manual of Equity Jurisprudence. — A Manual of Equity
Jurisprudence for Practitioners and Students, founded on the Works
of Story and other writers, comprising the Fundamental Principles
and the points of Equity usually occurring in General Practice.
By Josiah W. Smith, Q.C. Fifteenth Edition. By Sydney E.
Williams, Esq., Barrister-at-Law. 12mo. 1900. 12*. 6d.
""We can safely recommend ' Smith's Equity' in its new clothes to the atten-
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" Smith's Manuals of Common Law and Equity must he resorted to as the
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porated Law Society." — From Dr. Eoi.lit's Lecture.
Smith's Practical Exposition of the Principles of Equity, illus-
trated by the Leading Decisions thereon. For the use of Students
and Practitioners. Second Edition. By H. Aethue Smith, M.A.,
LL.B., Esq., Barrister-at-Law. Demy 8vo. 1888. 21s.
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14 STEVENS AND SONS, LIMITED,
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Williams' Outlines of Equity,— A Concise View of the Principles of
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Author 0/ "The Law relating to Legal Representatives," &c.
Eoyal l2mo. 1900. 5s.
ESTOPPEL,— Everest and Strode's Law of Estoppel. By Lancelot
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Demy 8vo. 1884. 18s.
EVIDENCE.— Campbell's RulingCases, Vol. XL— W* "Digests."
Wills' Theory and Practice of the Law of Evidence. — By
Wm. "Wills, Esq., Barristcr-at-Law. Demy8vo. 1894. 10s. 6d.
"It contains a large amount of valuable information, very tersely and
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EVIDENCE ON COMMISSION.— Hume-Williams and Macklin's
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A. Bomeb Maoklin, Barristers-at-Law. Demy 8vo. 1895. 12s. 6d.
EXAMINATION GUIDES.— Bar Examination Guide. By H. D.
"Woodcock, and R. C. Maxwell, Esqrs., Barristers-at-Law.
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Bar Examination Guide— Lecture Supplement, 1896. Ket2s.
Shearwood's Guide for Candidates for the Professions of
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Uttley's How to Become a Solicitor! or, Hints for Articled
Clerks.— By T. F. Uttley, Solicitor. Eoyal 12mo. 1894. 5s.
EXECUTIONS. — Edwards' Law of Execution upon Judgments
and Orders of the Chancery and Queen's Bench Divisions.
By C. J. Edwards, Esq., Barrister-at-Law. Demy 8vo. 1888. 16s.
EXECUTORS. — Macaskie's Treatise on the Law of Executors
and .Administrators. By S. C. Macaseie, Esq., Barrister-at-Law.
8vo. 1881. 10s. 6d.
Williams' Law of Executors and Administrators. — Ninth Edition.
By the Hon. Sir Roland Vauohan Wtt.t.tamh, a Justice of the High
Court. 2 vols. Boy. 8vo. 1893. 3/. 16s.
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thoroughly brought down to the present date." — Law Journal.
Williams' Law relating to Legal Representatives. — Real and
Personal. By Sydney E. "Williams, Esq. , Author of ' ' Law and
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*in as short a form as pot-sible, :i summary of the law of legal representatives as
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FARM, LAW OF. — Dixon's Law of the Farm: including the Cases
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Barrister-at-Law. Demy Svo. 1892. 26s.
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FINANCE ACT.— Vide " Death' Duties."
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risters-at-Law. Demy 8vo. 1883. 18s.
FORMS.— Chitty's Forms of Practical Proceedings in the Queen's
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Hebbebt Chitty, Esqrs., Barristers-at-Law. (In preparation.)
Daniell's Forms and Precedents of Proceedings in the Chan-
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Seton.— FiAs " Equity."
FRAUD AND MISREPRESENTATION.— Moncreiffs Treatise
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FRENCH LAW. — Cachard's French Civil Code. — By Heney
Cachabd, B.A., and Counsellor-at-La-w of the New York Bar,
Lieencie en Droit de la Faculte de Paris. Demy 8vo. 1895. 20s.
Goirand's Treatise upon French Commercial Law and the
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Demy 8vo. 1898. U-
Sewell's Outline of French Law as affecting British Subjects. —
By J. T. B. Sewell, M.A., LL.D., Solicitor. Demy 8vo. 1897.
' 10s. U.
GAME LAWS. — Warry's Game Laws of England. "With an
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Esq., Barrister-at-Law. Royal 12mo. 1896. 10s. 6d.
" The author has treated the subject in a clear and lucid style."— Law Times.
GOLD COAST ORDINANCES.— Griffith's Ordinances of the
Gold Coast Colony. — By Sir William Bbandeoed Geiitith,
Chief Justice of the Gold Coast Colony. 2 vols. Roy. 8vo. 1898. SI.
GOODWILL.— Allan's Law relating to Goodwill.— By Chaeles E.
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" A most useful book of reference on all matters connected with the parish
both civil and ecclesiastical." — Law Journal.
" Kept in touch with every recent change." — Law Times.
PARTNERSHIP.— Pollock's Digest of the Law of Partnership.
Seventh Edition. With an Appendix of Forms. By Sir Frederick
Pollock, Bart., Barrister-at-Law, Author of "Principles of Con-
tract," " The Law of Torts," &c. Demy 8vo. 1900. 10s.
PATENTS— Campbell's Ruling Cases, Vol. XX.— Tide "Digests,"
p. 10.
Edmunds on Patents. — The Law and Practioe of Letters Patent for
Inventions. By Lewis Edmunds, Q.C. Second Edition. ByT. II.
Stevens, Esq., Barrister-at-Law. Roy. 8vo. 1897. 11. lis.
" We have nothing but commendation for the book." — Solicitors' Journal.
" It would be difficult to make it more complete." — Law Times.
Edmunds' Patents, Designs and Trade Marks Acts, 1883 to
1888, Consolidated with an Index. Second Edition. By Lewis
Edmunds, Q.C., D.Sc, LL.B. Imp.Svo. 1S95. SS'ct 2s. 6d.
Gordon's Monopolies by Patents and the Statutable Remedies
available to the Public. By J. W. Gordon, Esq., Barrister-at-
Law. Demy Svo. 1897. 18s.
"A treatise which we think must take a unique place in our legal literature."
— Law Times.
Gordon's Compulsory Licences under the Patents Acts. By
J. W. Gordon, Esq., Barrister-at-Law, Author of " Monopolies by
Pliant." Demy Svo. 1899. ig 5 .
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119 & 120, CHANCERY LANE, LONDON, "W.C. 23
PAT E N TS— continued.
Johnson's Patentees' Manual. — A Treatise on the Law and
Practice of Patents for Inventions. Sixth Edition. By James John-
son, Esq., Barrister-at-Law ; and J. Henby Johnson, Solicitor and
Patent Agent. Demy 8to. 1890. 10s. 6d.
Johnson's Epitome of Patent Laws and Practice. Third Edition.
Crown 8vo. 1900. Net, 2s. 6d.
Morris's Patents Conveyancing. — Being a Collection of Precedents
in Conveyancing in relation to Letters Patent for Inventions.
With Dissertations and Copious Notes on the Law and Practice. By
Robert Moeeis, Esq., Barrister-at-Law. Royal 8vo. 1887. 11. 6s.
Thompson's Handbook of Patent Law of all Countries. — By
Wm. P. Thompson. Tenth Edition, with Addendum. 12mo. 1899.
Net, 2s. 6d.
Thompson's Handbookof British Patent Law. Eleventh Edition.
12mo. 1899. Net, 6d.
PAWNBROKING.— Attenborough's Law of Pawnbroking, with
the Pawnbrokers Act, 1872, and the Factors Act, 1889, and
Notes thereon. By Chaeles L. Attenbobough, Esq., Barrister-
at-Law. Post 8vo. 1897. Net, 3s.
PERSONAL PROPERTY.— Smith,— Vide " Real Property."
PLEADING. — Bullen and Leake's Precedents of Pleadings, with
Notes and Rules relating to Pleading. Eifth Edition. Revised and
Adapted to the Present Practice in the Queen's Bench Division of
the High Court of Justice. By Thomas J. Bullen, Esq., Barrister-
at-Law, Ctexl Dodd, Esq., Q.C., and C. W. Clifford, Esq., Bar-
rister-at-Law. Demy 8vo. 1897. 38s.
" The standard work on modern pleading.' 1 — Law Journal.
Odgers' Principles of Pleading, Practice and Procedure in Civil
Actions in the High Court of Justice. — Fourth Edition. By W.
Biake Odgees, LL.D., Q.C., Recorder of Plymouth, Author of "A
Digest of the Law of Libel and Slander." Demy 8vo. 1900. 12s. 6d.
" The student or practitioner who desires instruction and practical guidance
in our modern system of pleading cannot do better than possess himself of
Mr. Odgers' book." — Law Journal. f
" Includes a careful outline of the procedure in an ordinary action at law.
This sketch will be of the utmost value to students, and ought to win the ap-
proval also of examining bodies, as it is remarkably free from any adaptability to
the purposes of the mere crammer." — Literature.
" Of immense assistance to junior counsel." — Law Notes.
" Terse, clear and pointed." — Law Quarterly Review.
POISONS. — Reports of Trials for Murder by Poisoning. — With
Chemical Introductions and Notes. By G. Latham Browne, Esq.,
Barrister-at-Law, andC. G. Stewaet, Senior Assistant in the Labo-
ratory of St. Thomas's Hospital, &c. Demy 8vo. 1883. 12s. 6d.
POWERS. — Farwell on Powers, — A Concise Treatise on Powers.
Second Edition. By George Farwell, Esq., Q.C., assisted by
W. R. Sheldon, Esq., Barrister-at- Law. Royal 8vo. 1893. 11. 5s.
PRINCIPAL AND AGENT.— Wright's Law of Principal and Agent.
By E. B. Weight, Esq., Barrister-at-Law. Demy8vo. 1894. 18s.
" Clearly arranged and clearly written."— Law Times.
" May with confidence be recommended to all legal practitioners as an accu-
rate and handy text book on the subjects comprised in it."— Solicitors' Journal.
PRIVY COUNCIL LAW.— Wheeler's Privy Council Law: A Synop-
sis of all the Appeals decided by the Judicial Committee (including
Indian Appeals) from 1876 to 1891. Together with a precis of the
Cases from the Supreme Court of Canada. By Geoege Wheelee,
Esq., Barrister-at-Law, and of the Judicial Department of the Privy
Council. Royal 8vo. 1893. 31s. U.
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24 STEVENS AND SONS, LIMITED,
PROBATE.— Powles and Oakley's Law and Practice relating to
Probate and Administration. By L. D. Powles, Barrister-at-
Law, and T. W. H. Oaklet, of the Probate Registry. (Being a.
Third Edition of " Browne on Probate.") Demy8vo. 1892. 11. 10«.
PROPERTY.— See also " Real Property."
Raleigh's Outline ofthe Law of Property.— Demy 8vo. 1890. 7s.6d.
Strahan's General View of the Law of Property. — Second Edit.
By J. A. Steahan, assisted by J. Sinclaib Baxteb, Esqra., Barris-
ters-at-Law. Demy 8vo. 1897. 12*. 6d.
" The student will not easily find a better general view of the law of property
than that which is contained in thia book." — Solicitor*' Journal.
" "We know of no better book for the class-room." — Law Times.
PUBLIC HEALTH.— Bazalgette and Humphreys.— Vide "Local
and Municipal Government."
Hunt, — Vide " London Local Government."
PUBLIC MEETINGS,— Chambers' Handbook for Public Meet-
ings, including Hints as to the Summoning and Management of
them. Second Edition. By Geoboe F. Chambers, Esq., Barrister-
at-Law. Demy 8vo. 1886. Net, 2s. 6d.
QUARTER SESSIONS.— See " Criminal Law."
Pritchard's Quarter Sessions. Second Edition. By J. B.
Matthews, Esq., Barrister-at-Law. (In preparation.)
RAILWAY RATES.— Darlington's Railway Rates and the Carriage
of Merchandise by Railway ; including the Provisional Orders of
the Board of Trade as sanctioned by Parliament, containing the
Classification of Traffic and Schedule of Maximum Rates and Charges
applicable to the Railways of Great Britain and Ireland. By H. R.
Darlinoton, Esq., Barrister-at-Law. Demy 8vo. 1893. 11. 5s.
RAILWAYS.— Browne and Theobald's Law of Railway Com-
panies. — Being a Collection of the Acts and Orders relating to
Railway Companies in Great Britain and Ireland, with Notes of all
the Cases decided thereon. Third Edition. By J. H. Balfoub
Browne, Esq., one of Her Majesty's Counsel, and Fbank Balfoub
Browne, Esq., Barrister-at-Law. Royal 8vo. 1899. 11. 2s.
'* Contains in a very concise form the whole law of railways." — The Times.
" It is difficult to find in this work any subject in connection with railways
which is not dealt with." — Law Times.
" Practitioners who require a comprehensive treatise on railway law will find it
indispensable." — Law Journal.
RATES AND RATING.— Castle's Law and Practice of Rating.—
Third Edition. By Edwabd James Castle, Esq., one of Her
Majesty's Counsel. Demy 8vo. 1895. 25s.
"A sure and safe guide." — Law Magazine.
" Mr. Castle's book has hitherto held a very high place, and the success that
has attended it seems assured to the new edition." — Law Journal.
" A compendious treatise, which has earned the goodwill of the Profession on
account of its conciseness, its lucidity, and its accuracy."— Law Times.
Chambers' Law relating to Local Rates; with especial reference
to the Powers and Duties of Rate-levying Local Authorities, and
their Officers ; comprising the Statutes in full and a Digest of 718
Cases. Seoond Edition. By G. F. Chambebs, Esq., Barrister-at-
Law. Royal 8vo. 1889. 10s. 6d.
REAL PROPERTY,— Digby's History ofthe Law of Real Pro-
perty, Fifth Edition. Demy 8vo. 1897. 12s. 6d.
Leake's Elementary Digest of the Law of Property in Land, —
Containing : Introduction. Part I. The Souroes of the Law. —
Part II. Estates in Land. — Part III. The Law of Uses and Profits
of Land. By Stephen Martin Leake, Barrister-at-Law. Demy
8vo. 1874— 18S8. Net, 30s.
*„* All standard Law Works are kept in Stock, inlaw calf and other bindings.
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REAL PROPERTY— continued.
Lightwood's Treatise on Possession of Land ! with a ohapter on
the Heal Property Limitation Acts, 1833 and 1874. — By John M.
Liqhtwood, Esq., Barrister-at-La-w. Demy 8vo. 1894. 15s.
Shearwood's Real Property. — A Concise Abridgment of the Law of
Real Property and an Introduction to Conveyancing. Designed to
facilitate the subject for Students preparing for examination. By
Joseph A. Sheabwood, Esq., Barrister-at-Law. Third Edition.
Demy 8vo. 1885. 8s. 6d.
Shelford's Real Property Statutes, — Comprising the principal
Statutes relating to Real Property passed in the reigns of Kin g
William IV. and Queen Victoria, with Notes of Decided Cases.
Ninth Edition. By Thomas H. Caeson, assisted by Habold B.
Bompas, Esqrs., Barristers-at-Law. Royal 8vo. 1893. SO*.
" Absolutely indispensable to conveyancing and equity lawyers."
Smith's Real and Personal Property. — A Compendium of the Law
of Real and Personal Property, primarily connected with Con-
veyancing. Designed as a Second Book for Students, and as a
Digest of the most useful learning for Practitioners. By Josiah W.
Smith, B.C.L., Q.C. Sixth Edition. By the Author and J. Teus-
tbam:, LL.M., Barrister-at-Law. 2 vols. Demy 8vo. 1884. 11. Is.
" A book -which he (the student) may read over and over again -with profit and
pleasure.*' — Law Times.
" Will be found of very great service to the practitioner." — Solicitors* Journal.
" A really useful and valuable work on our system of Conveyancing."— Law
Students* Journal.
Strahan. — Vide "Property."
REGISTRATION.— Rogers.— Vide "Elections."
Fox and Smith's Registration Cases. (1886—1895). Royal 8vo.
Calf, net, 21. 10s.
Smith's (C. Lacey) Registration Cases. Part I. (1895-96).
Net, 6s. 6d. Part II. (1896), 5s. Part III. (1897), 4s. Part IV.
(1898-9), 6s. Part V. (1899-1900), 4s.
Lawson's Notes of Decisions under the Representation of the
People Acts and the Registration Acts, 1885 — 1893, inclu-
sive, — By Wh. Lawson, Barrister-at-Law. Demy 8vo. 1894. 24*.
Ditto, ditto, for 1894, 1895, 1896 and 1897. Each net 4s. 6d.
Ditto, ditto, for 1898. Net, 7s. 6d.
Ditto, ditto, for 1899. Net, is. 6d.
REQUISITIONS ON TITLE,— D\ck\ns.— Vide "Conveyancing."
RIVERS POLLUTION.— Haworth's Rivers Pollution,— The Statute
Law relating to Rivers Pollution, containing the Rivers Pollution
Prevention Acts, 1876 and 1893, together with the Special Acts in
force in the West Riding of Yorkshire and the County of Lancaster.
By Chaeles Joseph Hawoeth, Solicitor, B.A. (Cantab.), LL.B.
(London). Royal 12mo. 1897. 6s.
ROMAN LAW. — Abdy and Walker's Institutes of Justinian, Trans-
lated, with Notes, by J. T. Abdy, LL.D., and the Lite Bbyan Waijxeb,
M.A., LL.D. Crown 8vo. 1876. 16s.
Abdy and Walker's Commentaries of Gaius and Rules of Ulpian.
With a Translation and Notes, by J. T. Abdy, LL.D., late Regius
Professor of Laws in the University of Cambridge, and the late
Bbyan Waikeb, M.A., LL.D. New Edition by Bbyan Walkbb.
Crown 8vo. 1885. 16s.
Buckler's Origin and History of Contract in Roman Law down
to the end of the Republican Period. By W. H. Buckles,
B. A., LL.B. Post8vo. Second Edition. (In the press.)
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26 STEVENS AND SONS, LIMITED,
ROMAN LAW— continued.
Goodwin's XII. Tables.— By Fbedebiox Goodwin, LL.D. London.
Royal 12mo. 1886. 3s. 6d.
Greene's Outlines of Roman Law. — Consisting chiefly of an
Analysis and Summary of the Institutes. For the use of Students.
By T. Whttcombe Gbeene, Barrister-at-law. Fourth Edition.
Foolscap 8vo. 1884. 7s. 6d.
Grueber's LexAquilia. — The Roman Law of Damage to Property :
being a Commentary on the Title of the Digest " Ad Legem Aqui-
liam" (ix. 2). With an Introduction to the Study of the Corpus
Iuris CiviJis. By Ebwtn Gbuebeb, Dr. Jnr.,M.A. 8vo. 1886. 10s. 6d.
Holland's Institutes of Justinian. — Second Edition. Extra reap.
8vo. 1881. 6s.
Holland and Shadwell's Select Titles from the Digest of Jus-
tinian.— Demy 8vo. 1881. 14s.
Holland's Gentilis Alberici, I. CD., I.C.P.R., de lure Belli Libri
Tres, — EdiditT.E. Holland, LCD. Small 4to., half -morocco. 21s.
Monro's Digest IX. 2. LexAquilia. Translated, with Notes, by
C. H. Moneo, M.A. Crown 8vo. 1898. 6s.
Monro's Digest XIX, 2, Locati Conducti. Translated, with Notes,
by C. H. Moneo, M.A^ Crown 8vo. 1891. 6s.
Monro's Digest XLVII, 2, De Furtis. Translated, with Notes, by
C. H. Monko, M.A. Crown 8vo. 1893. 5s.
Moyle's Imperatoris Justiniani Institutiones. — Third Edition.
2 vols. Demy 8vo. 1896. II. 2s.
Poste's Elements of Roman Law, — ByGaius. With a Translation
and Commentary. Third Edition. By Edwabd Posts, Esq.,
Barrister-at-Law. Demy 8vo. 1890. 18s.
Roby's Introduction to the Study of Justinian's Digest, con-
taining an account of its composition and of the Jurists used or
referred to therein. By H. J. Robt, M.A. Demy 8vo. 1886. 9s.
Roby's Justinian's Digest. — Lib. VII., Tit. I. De Usufructu, with
a Legal and Philological Commentary. By H. J. Robt, M.A.
Demy 8vo. 1884. 9s.
Or the Two Parts complete in One Volume. Demy 8vo. 18s.
Walker's Selected Titles from Justinian's Digest. — Annotated by
the late Bryan Walker, M.A., LL.D.
Part I. Mandati vel Contra. Digest XYn. I. Crown 8vo. 1879. 6s.
Part III. De Condiotionibus. Digest xn. 1 and 4 — 7, and
Digest xm. 1—3. Crown 8to. 1881. 6s.
Walker's Fragments of the Perpetual Edict of Salvius Julianus.
Colleoted and annotated by Bryan Walkeb, M.A., LL.D. Crown
8vo. 1877. 6s.
Whewell's Grotius de Jure Belli et Pacis, with the Notes of Bar-
beyrao and others ; accompanied by an abridged Translation of the
Text, by W. Whewell, D.D. 3 vols. Demy 8vo. 1863. 12s.
The Translation separate. 6s.
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RULING CASES.— Campbell.— Vide "Digests," p. 10.
SALES.— Blackburn on Sales, A Treatise on the Effect of the Con-
tract of Sale on the Legal Rights of Property and Possession in
Goods, Wares, and Merchandise. By Lord Blacxbuen. 2nd Edit.
By J. C. Graham, Esq., Barrister-at-Law. Royal 8vo. 1885. II. Is.
"We have no hesitation in saying that the work has been edited with re-
markable ability and success."—- Law Quarterly Review.
SALVAGE, — Kennedy's Treatise on the Law of Civil Salvage, — By
the Hon. Sir William R. Kennedy, a Justioe of the High Court.
Royal 8vo. 1891. 12s.
*' The best work on the law of salvage. It is a complete exposition of the
subject, and as such is accurate and exhaustive." — Law Times.
SHERIFF LAW.— Mather's Compendium of Sheriff Law, espe-
cially in relation to Writs of Execution. — By Philip E. Mathee,
Solicitor and Notary, formerly Under Sheriff of Newcastle-on-Tyne.
Royal 8vo. 1894. 25s.
"We think that this book will be of very great assistance to any persons who
may fill the positions of high sheriff and under-sheriff from this time forth. The
whole of the legal profession will derive great advantage from having this
volume to consult." — Law Times.
SH I PPI NG.— Carver.— Vide " Carriers."
Marsden's Digest of Cases relating to Shipping, Admiralty,
and Insurance Law, down to the end of 1897. — By Reginald
G. Marsden, Esq., Barrister-at-Law, Author of "The Law of
Collisions at Sea." Royal 8vo. 1899. 30s.
Pulling's Merchant Shipping Act, 1894. — With Introduction,
Notes, and Index. By Alexandee Pulling, Esq., Barrister-at-
Law. Royal 8vo. 1894. ' Net 6s.
Pulling's Shipping Code; being the Merchant Shipping Act, 1894
(57 & 58 Vict. c. 60) ; With Introduction, Notes, Tables, Rules,
Orders, Eorms, and a Pull Index. — By Alexander Pulling, Esq.,
Barrister-at-Law. Royal 8vo. 1894. Net 7s. 6d.
Temperley's Merchant Shipping Act, 1894 (57 & 58 Vict,
c. 60). With an Introduction ; Notes, including all Cases decided
under the former enactments consolidated in this Act ; a Comparative
Table of Sections of the Former and Present Acts ; an Appendix of
Rules, Regulations, Eorms, etc., and a Copious Index. — By Robebt
Tempeelet, Esq., Barrister-at-Law. Royal 8vo. 1895. 25s.
" A full, complete, and most satisfactory work." — Law Quarterly Review.
"A monument of well-directed industry and knowledge directed to the
elucidation of the most comprehensive and complicated Act." — Law Journal.
S LAN D E R.— Odgers.— Vide " Libel and Slander."
SOLICITORS. — Cordery's Law relating to Solicitors of the
Supreme Court of Judicature. With an Appendix of Statutes
and Rules, the Colonial Attornies Relief Acts, and Notes on Appoint-
ments open to Solicitors, and the Right to Admission to the Colonies,
to which is added an Appendix of Precedents. Third Edition. By
A. Cordery, Esq., Barrister-at-Law. Demy 8vo. 1899. 21s.
" The leading authority on the law relating to solicitors." — Law Journal.
"A complete compendium of the law." — Law Times.
" Thoroughly up to date in every respect." — Law Quarterly Beview.
Turner. — Vide "Conveyancing" and "Vendors and Purchasers."
SPECIFIC PERFORMANCE.— Fry's Treatise on the Specific
Performance of Contracts. By the Right Hon. Sir Edward Fet.
Third Edition. By the Author and E. Portsmouth Ert, Esq.,
Barrister-at-Law. Royal 8vo. 1892. 11. 16s.
*,* All standard Law Works are kept in Slock, in law calf and other bindings.
28 STEVENS AND SONS, LIMITED,
STAMP LAWS.— Highmore's Stamp Laws.— Being the Stamp Acta
of 1891 : with the Acts amending and extending the same, in-
cluding the Finance Act, 1899, together with other Acts imposing
or relating to Stamp Duties, and Notes of Decided Cases ; also an
Introduction, and an Appendix containing Tables showing the com-
parison with the antecedent Law. By Nathaniel Joseph Hiqhmobe,
Assistant-Solicitor of the Inland Revenue. Demy8vo. 1900. 10s. 6d.
"Will be found of the greatest use to solicitors, the officers of companies, and
all men of business." — Law Journal, Feb. 10, 1900.
" This work is not only complete up to the present year, but is excellently
arranged." — Irish Law Times, Feb. 10, 1900.
"A very comprehensive volume, fulfilling every requirement. . . . The
various notes to the sections of the several Acts incorporated in the volume are
fully and accurately set out, the points of the decided cases clearly expressed,
and the effect and object of the enactment indicated ; and what must be of
especial value to the practitioner, the practice at Somerset House with regard
to all matters coming before that institution is stated." — Justice of the Peace,
Feb. 24, 1900.
"Mr. Highmore's 'Stamp Laws' leaves nothing undone."— Me Civilian,
March 3, 1900.
STATUTE LAW,— Wilberforoe on Statute Law. The Principles
which govern the Construction and Operation of Statutes. By E.
"Wilbeeeoece, Esq., Barrister-at-Law. 1881. 18s.
STATUTES, and vide "Acts of Parliament."
Chitty's Statutes.— New Edition.— The Statutes of Practical Utility,
from the earliest times to 1894 inclusive. Arranged in Alpha-
betical and Chronological Order ; with Notes and Indexes. Fifth
Edition. By J. M. Lett, Esq., Barrister-at-Law. Royal 8vo.
Complete with Index. In 13 Volumes. 1894-1895. 13/. 13s.
Annual Supplements. By J. M. Lelt, Esq. 1895, 5s.
1896, 10s. 1897, 5s. 1898, Is. U. 1899, Is. U.
"It is a book which no public library should be without." —
' ' A work of permanent value to the practising lawyer." — Solicitors'
Journal.
"The profession will feel grateful both to the editor and the
publishers of a work which will be found of the highest value." —
Law Journal.
" A legal work of the very highest importance. . . . Few besides
lawyers will, we suspect, realise the amount of work which such an
undertaking involves to the editor, who appears to have spared no
pains to give a clear, orderly, and methodical character to the com-
pilation." — Daily News.
"This collection has fulfilled a purpose of usefulness only to be
understood by those who are acquainted with the amazing com-
plexity of English statute law, with its bewildering incoherence
and painful heterogeneity." — Pall Mall Gazette.
" Indispensable in the library of every lawyer."— Saturday Review.
"To all concerned with the laws of England, Chitty's Statutes of
Practical Utility are of essential importance, whilst to the practising
lawyer they are an absolute necessity." — Law Times.
"It is apparently the belief of some popular novelists that
lawyers in their difficulties still uniformly consult daily Coke upon
Littleton and Blaokstone. Those who know better are aware that
the lawyer's Bible is the • Statutes of Practical Utility '—that they
are his working tools, even more than accredited text-books or
' authorised reports.' More than one judge has been heard to say
that with the ' Statutes of Practioal Utility ' at his elbow on the
benoh he was apprehensive of no difficulties which might arise."
The Times.
*„* All standard Law Works are kept in Stock, in law calf and other bindings.
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SUCCESSION, — Holdsworth and Viokers' Law of Succession,
Testamentary and I ntestate. Demy 8vo. 1899. 10s. 6d.
SUMMARY CONVICTIONS.— Paley's Law and Practice of Sum-
mary Convictions under the Summary Jurisdiction Acts,
1848 — 1884; including Proceedings Preliminary and Subse-
quent to Convictions, and the Responsibility of Convicting
Magistrates and their Officers, with the Summary Jurisdic-
tion Rules, 1886, and Forms.— Seventh Edition. By W. H.
Maonamaba, Esq., Barrister-at-Law. Demy 8vo. 1892. 24s.
TAXPAYERS' GUIDES.— Vide "House," "Inoome," & "Land Tax."
THEATRES AND MUSIC HALLS.— Geary's Law of Theatres
and Music Halls, including Contracts and Precedents of
Contracts. — By W. N. M. Geaby, J.P. With Historioal Introduc-
tion. By James Williams, Esqrs., Barristers-at-Law. 8vo.
1885. 6s.
TORTS. — Addison on Torts. — A Treatise on the Law of Torts; or
Wrongs and their Remedies. Seventh Edition. By Horace
Smith, Esq., Bencher of the Inner Temple, Metropolitan Magis-
trate, Editor of "Addison on Contracts," &c, and A. P. Pebceval
Keep, Esq., Barrister-at-Law. Royal 8vo. 1893. 11. 18s.
" As an exhaustive digest of all the cases which are likely to be cited in
practice it stands without a rival." — Law Journal.
"As now presented, this valuable treatise must prove highly acceptable to
judges and the profession." — Law Times.
" An indispensable addition to every lawyer's library." — Law Magazine.
Ball's Leading Cases on the Law of Torts, with Notes. Edited
by W. E. Bah., LL.D., Esq., Barrister-at-Law, Author of " Prin-
ciples of Torts and Contracts." Royal 8vo. 1884. 1?. Is.
Bigelow's Elements of the Law of Torts. — A Text-Book for
Students. By Melville M. Bigeldw, Ph.D., Lecturer in the Law
School of the University of Boston, U.S.A. Crown 8vo. 1889. 10s. 6d.
Innes' Principles of the Law of Torts. — ByL. C. Inhes, lately one
of the Judges of the High Court, Madras, Author of "A Digest of
the Law of Easements." Demy 8vo. 1891. 10s. 6d.
" A useful addition to any law library." — Law Quarterly Review.
Pollock's Law of Torts: a Treatise on the Principles of Obligations
arising from Civil Wrongs in the Common Law. Sixth Edition.
By Sir Fbedebick Pollook, Bart., Barrister-at-Law. Author of
" Principles of Contract," " A Digest of the Law of Partnership,"
&c. Demy 8vo. [In the press.)
" Concise, logically arranged, and accurate." — Law Times.
" Incomparably the best work that has been written on the subject." —
Literature.
" A book which is well worthy to stand beside the companion volume on
'Contracts.' Unlike so many law-books, especially on this subject, it is no mere
digest of cases, but bears the impress of the mind of the writer from beginning
to end." — Law Journal.
" The work is one ' professing to select rather than to collect authorities,' but
the leading cases on each branch of the subject will be found ably dealt with.
A work bearing Mr. Pollock's name requires no recommendation. If it did, we
could heartily recommend this able, thoughtful, and valuable book .... as a
very successful and instructive attempt to seek out and expound the principles
of duty and liability underlying a branch of the law in which the Scottish
and English systems do not materially differ." — Journal of Jurisprudence.
*
»* All standard Law Works arekept in Stock, in law calfandother bindings,
30 STEVENS AND SONS, LIMITED,
TRADE MARKS,— Sebastian on the Law of Trade Marks and
their Registration, and matters connected therewith, including a
chapter on Goodwill ; the Patents, Designs and Trade Marks Acts,
1883-8, and the Trade Marks Rules and Instructions thereunder;
with Forms and Precedents; the Merchandize Marks Acts, 1887-94,
and other Statutory Enactments ; the United States Statutes, 1870-82,
and the Rules and Forms thereunder ; and the Treaty with the United
States, 1877. By Lewis Boyd Sebastian, Esq., Barrister-at-Law.
Fourth Edition. By the Author and Habey Bated Hemming, Esq.,
Barrister-at-Law. Royal 8to. 1899. U. 10«.
" : Stands alone aa an authority upon the law of trade-marks and their regis-
tration." — Law Journal.
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